Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Death of a Member

Mr. Speaker: I regret to have to inform the House of the death of Eric Samuel Heifer, esquire, the Member for Liverpool, Walton, and I desire, on behalf of the House, to express our sense of the loss we have sustained and our sympathy with the relatives of the hon. Member.

Oral Answers to Questions — TRANSPORT

Railway Construction, Scotland

Mr. Wray: To ask the Secretary of State for Transport what measures Her Majesty's Government are taking to avoid damage to Scottish industry and people resulting from delay in the construction of direct railway lines between Scotland and the continent for its goods and passengers.

The Secretary of State for Transport (Mr. Malcolm Rifkind): The electrification of the east coast main line and the upgrading of routes between London and the channel tunnel will give Scotland excellent rail communications with the continent when the tunnel opens. British Rail's planned upgrading of the west coast main line would, in due course, further strengthen those links.

Mr. Wray: I cannot believe that the Minister gave that reply. Trains from London to Lille travel at 100 mph, yet those from London to Paris and from Glasgow to Paris travel at 65 mph. We want a TGV line from Glasgow to Paris. London is the only British city with a direct fink to the continent. We should follow the example of the French, who are willing to spend £20 billion to increase the speed of the TGV train from 186 mph to 250 mph.

Mr. Rifkind: I must remind the hon. Gentleman that, apart from France, the United Kingdom has more high-speed trains than any country in the world. The electrification of the east coast main line from London to Edinburgh will be the largest single electrification or other railway project that British Rail has undertaken, and it will make a big contribution to improving the quality of travelling for the travelling public.

Mr. Gerald Bowden: When my right hon. and learned Friend considers direct links between Scotland and all parts of the United Kingdom and continental Europe will he take into account the benefits of using a route through Stratford in east London, which would avoid the bottleneck of central London and would provide fast traffic straight through for freight and passengers?

Mr. Rifkind: As my hon. Friend may know, the recommendations that British Rail put to me recently for a high-speed link from the channel tunnel to London involved consideration of several routes, including the option that he suggested.

Mrs. Margaret Ewing: As the Secretary of State is aware that only 23 per cent. of rail lines in Scotland are electrified, will he accept the strength of argument for electrification north of the central belt, especially as so many of our industries in the north-east and north of Scotland are export led?

Mr. Rifkind: As the hon. Lady probably knows, was pleased to be present last Thursday at the opening of the electrified InterCity line between Edinburgh and Glasgow. She will be aware that British Rail is holding discussions


with local authorities to see whether non-commercial benefits would flow from the electrification of northern routes.

London Underground

Mr. Harry Greenway: To ask the Secretary of State for Transport how much of London Underground's rolling stock in percentage terms has been brought into use in the past 12 months; and if he will make a statement.

The Minister for Public Transport (Mr. Roger Freeman): In the past year the public have not yet seen the benefits of the re-equipment programme. The first of the 85 new Central line trains will enter passenger service next spring and the first of the refurbished trains for the Bakerloo, Victoria, Circle and Hammersmith and City lines will enter service this July. Contracts have been let for more than two fifths of London Underground's trains to be replaced or completely modernised.

Mr. Greenway: I thank my hon. Friend for his support in getting the escalator at Greenford station back in action after it had been out of action for no fewer than seven months and for his admirable visit to Greenford.

Mr. Snape: That is another point in the polls.

Mr. Greenway: I thank the hon. Gentleman.
May I draw my hon. Friend's attention to the anticipated report of the Monopolies and Mergers Commission on London Underground? Press reports say that it shows that much more money will be needed for infrastructure, such as new signalling, drains, gullies and track. He will receive strong support from Conservative Members in his battles with the Treasury to get that money, which London needs.

Mr. Freeman: I am grateful to my hon. Friend's comments on my visit to Greenford. I am sure that he will be the first on the telephone if the escalator is not working at the station. My right hon. Friend the Secretary of State for Trade and Industry must decide when to publish the report of the Monopolies and Mergers Commission. Investment in the underground, excluding the Jubilee line and the east-west crossrail, is around £400 million per annum. There is certainly justification for increasing that amount. During the coming public expenditure round, my right hon. and learned Friend the Secretary of State for Transport will seriously consider what needs to be done.

Miss Hoey: The Minister may have helped the hon. Member for Ealing, North (Mr. Greenway) with his escalator problem, so would he like to visit Stockwell and Oval stations on the Northern line, where half the escalators have been out of action for a long time? Is it right that it should take a minimum of 16 weeks to fix an escalator? Would the hon. Gentleman like to give my area the prompt attention that he gave Ealing?

Mr. Freeman: I should be delighted to do that and to visit both stations. As the hon. Lady knows, my right hon. and learned Friend the Secretary of State is a rail enthusiast and, in addition to travelling regularly on British Rail trains, he recently visited stations on the Northern line. I shall get in touch with the hon. Lady and we shall fix a date on which I shall visit those two stations.

Mr. Prescott: Does the Minister accept the description given by the chairman of London Transport that the underground is an appalling shambles and at least £10 billion is needed to produce acceptable standards? Does the hon. Gentleman accept the rumour that the report by the Monopolies and Mergers Commission makes it clear that there are inadequate finances for the London underground? If so, will the hon. Gentleman make a statement to the House before the summer so that we can offer some hope to those suffering misery on the London underground?

Mr. Freeman: My right hon. Friend the Secretary of State for Trade and Industry will doubtless shortly publish the MMC's report on London Underground, and the hon. Gentleman should wait and read that document. The chairman of London Transport referred to a period going back many decades, during which there were both Labour and Conservative Governments.

Mr. Prescott: Is the chairman's statement true?

Mr. Freeman: There is no question but that the existing underground—setting on one side the mega-projects—is receiving substantial investment, but it needs more.

Canning Town (Railway)

Mr. Leighton: To ask the Secretary of State for Transport what proposals he has received for development of a new railway station at Canning Town.

Mr. Freeman: My right hon. and learned Friend has received a proposal from London Underground Ltd. for a station at Canning Town, which is included in the Bill for the Jubilee line extension which is currently before the House.

Mr. Leighton: Is the Minister aware of the sense of grievance in the east end of London because, compared with central and western London, we are often palmed off with what is second best and second rate, and that is threatening to happen again with the new station at Canning Town? I was told today that stations to the west on the Jubilee line are being designed by a firm of architects of international repute whereas stations to the east have been subcontracted out to a firm that no one has ever heard of. Is that true? Will the hon. Gentleman write to me about it? Finally—

Mr. Speaker: Order. One question, please.

Mr. Leighton: Is the hon. Gentleman aware that the design of Canning Town station is inferior? The hon. Gentleman was told that the cost of a decent, high-quality station would be an extra £40 million, whereas the Select Committee on Transport discovered that it would cost only an extra £8 million. Will the hon. Gentleman review the position with a view to giving us a decent station for the new railway line in the east end of London?

Mr. Freeman: Proceedings on the Jubilee line continue. My information is that the type of station that the hon. Gentleman and Newham want would cost an extra £7 million, which at the moment cannot be justified by the extra revenue that it would be likely to generate. It would involve putting the Northern line interchange at the same location as the docklands light railway and Jubilee line interchanges. The hon. Gentleman said that his area gets


second best. Not only is the docklands light railway being upgraded, but the Jubilee line extension to Stratford is a massive investment in, commitment to and support for the east end of London.

Mr. Spearing: Does the Minister recall his visit to Canning Town station and to my constituents when he and I walked the tracks together? Is he aware of the importance of the interchange between the docklands light railway on the docklands north bank and the Jubilee line on the south bank? The lines cross at Canning Town, as does the north London link, which he mentioned. Why should we have a second-class station there, where interchanging will be difficult? Does not a second-class station imply that the Government think that the inhabitants of Canning Town and the Beckton docklands area are second-class citizens?

Mr. Freeman: I remember my visit to Canning Town station with the hon. Gentleman. It seemed that the interchange between the docklands light railway and the Jubilee line at Canning Town was satisfactory and was in no sense a second-class station. I shall write to him and to his colleague, the hon. Member for Newham, North-East (Mr. Leighton), about the architect who is designing the station. It is true that passengers will have to pass through a tunnel to get to the north London line interchange, but to have all three lines intersecting with interconnecting platforms would cost an extra £7 million. At this stage, at least, the hon. Gentleman advances no justification for spending that extra money.

Dartford (Bridge)

Mr. Dunn: To ask the Secretary of State for Transport what is the name of the bridge currently under construction over the Thames at Dartford; and if he will make a statement.

The Minister for Roads and Traffic (Mr. Christopher Chope): No decision has yet been taken on a name for the new bridge.

Mr. Dunn: My hon. Friend will appreciate my disappointment with his answer. Will he confirm that the bridge will be named after neither Dartford nor Thurrock? Will he also pay tribute to all the men and women who have worked so hard to make the bridge a reality in north-west Kent?

Mr. Chope: I am happy to pay tribute to all the people who have worked on the construction of the bridge and to those who have been lobbying for it to be given one name or another. My hon. Friend is speculating and I could not possibly confirm or deny what he is saying.

Mr. Peter Bottomley: Does my hon. Friend accept that the one person to be neutral was the Chairman of the parliamentary Committee which sat for many weeks to discuss the matter and that, in tribute to my hon. Friend the Member for Chipping Barnet (Mr. Chapman), who has now gone into the silence of the Whips Office, perhaps the bridge should be called Sydney's bridge?

Mr. Chope: That is a novel suggestion which will be taken into account in the coming weeks.

British Rail (Customer Service)

Mr. Ian Taylor: To ask the Secretary of State for Transport if he plans to bring forward proposals which would compensate British Rail passengers for poor standards of customer service.

Mr. Rifkind: We are actively pursuing, in co-operation with British Rail, a number of ways in which a higher quality of service can be encouraged and rewarded. As part of this process, we are examining how the interests of passengers can be promoted and protected.

Mr. Taylor: I am grateful to the Secretary of State and heartily welcome his enthusiasm for rail transport. Will he share the misery of commuters from my constituency who suffer from the lack of announcements by British Rail, delays, a complete lack of punctuality and of facilities at stations and from problems of overcrowding caused because trains are not of the right length? They face all those problems, yet, as season ticket holders, they receive no compensation except through the minor and almost secret system of ex gratia payments which British Rail has introduced under the counter. Will he put the matter in the public domain and force British Rail to provide compensation to passengers if they suffer from the inadequacies of the current level of service and if British Rail simply fails to perform?

Mr. Rifkind: As my hon. Friend rightly says, there is an ex gratia payments scheme currently operated by British Rail, which last year paid out about £2·5 million to passengers who suffered from various inconveniences. My hon. Friend is right to refer to the need to consider extending facilities for passengers who have been gravely inconvenienced, not simply on the railways but in other areas. They are matters that my right hon. Friend the Prime Minister said would be the subject of the citizens' charter proposals which are being considered.

Mr. Fearn: Is the Minister aware that if compensation were allocated, British Rail, on its present standing, would lose about £270 million? If so, would not it also be true that the people of Kent and East Anglia would no longer have to pay rail fares?

Mr. Rifkind: The hon. Gentleman should not assume that press speculation is necessarily valid. Clearly, the level of compensation paid would depend on the criteria for entitlement to it, which are still to be considered. France is often given as an example of a country where compensation is paid to passengers. However, if one examines that idea in detail, one finds that TGV passengers receive compensation only if the train is more than three hours late. Therefore, the sums involved tend to be rather small.

Mr. Moate: Does my right hon. and learned Friend agree that Kent commuters in particular are entitled to a better standard of service and that the greatest improvement could be secured if he would approve soon the investment in the new Networker Express programme for the Kent coast? Do his new-found expressions of enthusiasm for rail investment include an early announcement of the 741 Networker Express programme for the Kent coast?

Mr. Rifkind: I can tell my hon. Friend that there are various ways in which Kent railway services have been


improved in the recent past and, no doubt, will be improved in the weeks and months to come. I cannot make a specific announcement today on the project to which my hon. Friend referred. However, I appreciate the importance attached by Kent commuters to improvement of that service.

Mr. Prescott: May I refer the Secretary of State, in his considerations of ideas for the citizens' charter, to his copy of "Moving Britain into the 1990s", which details the things that need to be done? That would continue the plagiarism of Labour's policies. Will he seriously consider repealing the conditions of carriage for British Rail, bringing in a detailed pricing policy for British Rail, assessing whether the Government have given sufficient financial resources to British Rail to enable it to meet the standards that he wishes to impose on it, and setting up an independent regulatory body to ensure that such standards are confirmed and carried out?

Mr. Rifkind: Those tempted by Labour's proposals for railways for the next Parliament will wish to reflect on what the previous Labour Government did. They will recall that investment in the railways fell each year between 1975 and 1979. They will be reminded that there was a net closure of railway lines—more railway lines closed than were opened during the period of the last Labour Government—whereas in the past 12 years, there has been a net increase in the rail network. They will also applaud the fact that under this Conservative Government no fewer than 163 railway stations have either been opened or reopened since 1979.

Ports Industry

Mr. Viggers: To ask the Secretary of State for Transport if he will make a statement on the level of efficiency of the ports industry.

The Minister for Shipping (Mr. Patrick McLoughlin): There has been a marked increase in productivity at many ports since the abolition of the dock labour scheme, with increased scope for investment. I expect further advances as a result of the privatisation of leading trust ports under the Ports Bill which is now before Parliament.

Mr. Viggers: I am grateful to my hon. Friend. Does he agree that since the abolition of the national dock labour scheme there have been dramatic improvements in efficiency and productivity in the docks? That must have substantially benefited our export trade. Bearing in mind that some people regarded the national dock labour scheme as the jewel in the crown of the special relationship between the Labour party and the trade union movement, has my hon. Friend had many demands for the reintroduction of the national dock labour scheme?

Mr. McLoughlin: We have had no demands from the industry or from the people who work in the docks, although I understand that the Opposition are considering whether they should reimpose such a scheme, which would only damage the port industry.

Mr. John D. Taylor: Why do the Government support the European Community's proposals to downgrade the port of Stranraer, not to proceed with making the railway line in western Scotland more efficient, and to divert cross-Irish sea transport to Fishguard?

Mr. McLoughlin: My right hon. and learned Friend the Secretary of State made a speech about the importance that the Government attach to freight and to attempting to move freight by rail. I will ensure that the right hon. Gentleman receives a full reply about Northern Ireland ports.

Ms. Walley: Why does there continue to be so little reference to the role of ports and shipping in an integrated transport infrastructure? Why do the Government measure everything in terms of efficiency rather than dovetailing our ports into the transport policy that we should have? Does the Minister accept that the trust ports already compete with the private sector? Why has he forced through reserve powers to sell off trust ports? Is not the Government's treatment of trust ports proof that neither the nation's health nor its transport is safe in their hands?

Mr. McLoughlin: What we have just heard from the Opposition is that they will pay no attention to efficiency but will be concerned only with bureaucratic planning of transport. We do not feel that that is the most appropriate way in which to develop transport policy. We shall concentrate on efficiency because we believe that that will bring greater opportunities to our ports industry. It has been pointed out that the powers for privatisation are reserve powers and will be used only after consultation with the ports. We believe that the trust ports will be far better served in the private sector. Indeed, a number of ports eagerly await the passage of the Bill so that they can move into the private sector.

Channel Tunnel

Ms. Ruddock: To ask the Secretary of State for Transport when he expects to make an announcement on the preferred route for the new channel tunnel rail link between London and the North Downs.

Mr. Jacques Arnold: To ask the Secretary of State for Transport if he will make a statement on British Rail's proposals for a high-speed rail link through south-east London and Kent.

Mr. Rifkind: We are considering British Rail's report and recommendations for the rail link carefully. It is too early to say when decisions may be announced.

Ms. Ruddock: Is it not remarkable that in his recent speech of enlightenment, supposedly signalling his conversion to rail, the Secretary of State devoted but a single sentence to the passenger rail link from the channel tunnel? Is that because he is deeply embarrassed about this long-running fiasco? Will he accept from me that he cannot delay further, that he should clearly announce that he has abandoned any consideration of a route through south London and that he will do the decent thing and look for an alternative that links Stratford and King's Cross?

Mr. Rifkind: As the recommendations from British Rail landed on my desk only a couple of weeks ago, it would have been remarkable if I had given them more than one sentence of consideration in a speech made last week. It is precisely because we wish to consider all the implications,


including the points raised by the hon. Lady, that it will take a little time to come to a judgment and a conclusion. That is what we are doing at present.

Mr. Arnold: My right hon. and learned Friend will be aware that my constituents in north-west Kent have had to put up with three years of blight, as four of the routes under consideration cross my constituency. Is he also aware that even more than a rapid decision, we want a right decision which properly takes into account the environmental considerations, because in north-west Kent we have nothing to gain in transport terms and a large amount to lose in terms of our environment?

Mr. Rifkind: My hon. Friend is correct to emphasise the importance of the environmental implications for Kent of whatever decision is reached. British Rail itself has said that if it is given approval to go ahead, its next step will be to consider a full environmental assessment of whatever turns out to be the preferred route.

Mr. Tony Banks: Is it not a fact that the Secretary of State is trying to work out a route that somehow avoids every marginal Conservative constituency in south-east London? Does he intend to make an announcement before the summer recess or is he hanging on for an election? If he is, we could be waiting an awfully long time for that decision.

Mr. Rifkind: I am touched by the hon. Gentleman's concern. However, he will appreciate that when a report that is 12 inches thick has been presented, he would be the first to criticise if we leapt to conclusions on it. 'We shall reach a decision and announce it when we have considered British Rail's recommendations and given them the proper attention that they require.

Mr. Barry Field: Will my right hon. and learned Friend reassure the House that when he considers the route through south London, he will do nothing to exacerbate the practice at Lymington of British Rail trains leaving just before the ferry docks from the Isle of Wight rather than just after, as that is a continual irritation to my constituents?

Mr. Speaker: Order. Is that towards the North Downs?

Mr. Rifkind: I am not certain whether that is towards the North Downs, Mr. Speaker, but. we shall certainly draw to the attention of British Rail what appear; to be a lack of co-ordination in the service available.

Mr. Simon Hughes: Before making his decision would not the Secretary of State be well advised to put out for consultation whatever recommendation he has received from British Rail? He will well remember that when his predecessor received the last report and an announcement was made to the public, there was a huge outcry, including from his own colleagues? Are not the route, and the need to pay for the environmental consequences of whichever route is chosen, matters on which consultation is needed and on which wise and careful decisions must be made —not least, if I may say so respectfully, for the sake of the Secretary of State's colleagues, who risk a great deal if he makes the wrong decision?

Mr. Rifkind: The principle of what the hon. Gentleman says cannot be questioned, and nor would I seek to do so. The important point, which I made a few moments ago, is that British Rail is not asking for a final decision at this

stage. It seeks approval to go ahead with a full environmental assessment of its preferred route. That will, indeed, involve a substantial degree of public consultation to take into account the points raised by not only the hon. Gentleman but my hon. Friends.

Passenger Safety

Mr. Bowis: To ask the Secretary of State for Transport what research has been carried out by or on behalf of his Department on the advisability of segregating drivers and passengers from vehicles (a) transported by ship or hovercraft and (b) transported by rail.

Mr. Freeman: For the channel tunnel car-carrying shuttles the plan is that drivers and passengers should stay in or very close to their cars. Eurotunnel believes that this procedure will be safe and the speediest way of unloading cars. The independent Anglo-French safety authority has said that it is satisfied with this system in principle, but that it wants further research to continue.

Mr. Bowis: Does my hon. Friend agree that one of the main reasons why occupants are separated from their vehicles on passenger ferries is the danger of the occasional spontaneous combustion of a vehicle? Does he therefore understand the concern about what would happen should that occur when passengers are inside their vehicles in enclosed carriages on a train in the channel tunnel? Can he assure us that research has been undertaken that will set people's minds at rest? Will he ensure that such research is published so that the public can be satisfied?

Mr. Freeman: I am grateful to my hon. Friend for raising this important issue. I assure him that research will continue and I will ensure that the House is informed of its conclusions before the channel tunnel service opens. The difference between cars being parked on the lower deck of a ferry and on the car-carrying shuttles going through the channel tunnel is that the cars on the shuttle will be in containers in which no more than five cars can be parked on any one deck. To that extent, the risk of fire is contained.
I understand my hon. Friend's concern and I will ensure that the results of the research are published.

Mr. Pike: Does the Minister recognise the growing concern, especially among families with young children, that there will be dangers in travelling through the channel tunnel in trains and in being confined to compartments, particularly if delays occur in the tunnel? Is it not time for serious consideration to be given to that and for alternative proposals to be forthcoming?

Mr. Freeman: I am sure that Eurotunnel will consider whatever sensible and practical alternatives are available. Recently, I had the pleasure and privilege of travelling through the channel tunnel—I think that I was the first Minister, either French or British, to do so. The journey took four and a half hours on one of the construction trains, but it will take around 30 minutes for the shuttles to travel between Folkestone and Calais underneath the channel. Passengers will be able to get out of their cars and travel from one vehicle to the next, but they will not be able to travel the entire length of the train. It remains to be seen whether passengers are prepared to accept this, but the Government firmly believe that the channel tunnel service will be a success.

Mr. Wolfson: When my hon. Friend publishes the results of the research will he include comparisons with the European experience of long-tunnel train travel where people remain, with safety, in their vehicles?

Mr. Freeman: Yes, I am sure that we shall do so. Those on the Opposition Front Bench have been pressing my right hon. and learned Friend the Secretary of State for Transport on the rail link. I am sure that the House will realise that as and when a rail link is built the amount of travel in tunnels—under the channel, through the north and south Downs and under the metropolis—will be considerable, whatever route is chosen. The experience of rail passengers travelling through long tunnels, especially in Japan, will be relevant.

"A Bus Strategy for London"

Mr. Cohen: To ask the Secretary of State for Transport how many responses he has received to his consultation paper entitled, "A Bus Strategy for London".

Mr. Freeman: We are continuing to receive official responses to our consultation paper "A Bus Strategy for London" and to date more than 200 have been received. I am not sure whether we have received one from the hon. Gentleman. The Government believe that a deregulated rather than centrally planned bus service in London will encourage more and varied services, so offering the best chance of increasing bus patronage.

Mr. Cohen: Does the Minister admit that he is riding along with deregulation in the bus strategy? When it has been adopted outside London, has not that meant 16 per cent. fewer buses? That would be a disaster for traffic in London. It might mean more buses in the rush hour but fewer, or perhaps none, off peak. Would not the quality of the bus fleet go down? Would not concessionary fares for pensioners and the travel card be placed at risk or be referred to the Office of Fair Trading? Does not that show that the Government are unsafe to steer London buses?

Mr. Freeman: I am afraid that the hon. Gentleman has his figures muddled. Since deregulation, figures for bus services outside London show an increase of about one fifth in the number of bus miles offered to passengers. There are more services by minibuses, double deckers, and coaches. The Government want to ensure that London has the same benefits—more bus miles offered to passengers —so that we can encourage more passengers onto the buses and thereby help to relieve congestion.

Mr. Dykes: Does my hon. Friend the Minister agree, none the less, that the experience of transport planning, here and in other countries, suggests that something less than full deregulation may be appropriate to the capital city? Will he bear in mind that need to compromise?

Mr. Freeman: We are still receiving consultation responses, including the contribution from the hon. Member for Leyton (Mr. Cohen). The Government have not reached a final decision on the format of deregulation. However, the central principle is clear. It divides the Opposition from the Government because we believe in a substantially deregulated market. More buses would come into London to offer their services, which would, hopefully, mean more passengers on the buses—

Mr. Prescott: What do the passengers think?

Mr. Freeman: I shall not be drawn into making a riposte. The Government believe strongly that, the more buses that are provided and offered to customers in London, the more people will travel on them and the less congested our roads will become.

Railway Industry, York

Mr. Gregory: To ask the Secretary of State for Transport if he has any plans to make an official visit to York to inspect the railway industry.

Mr. McLoughlin: I visited York on 14 January to launch the new diesel express class of 158 units on the transpennine route. A total of 128 of these units are being introduced on regional railways. They will make a significant improvement to regional railway services. I hope to visit York on 27 June to attend a meeting of the North Eastern transport users' consultative committee.

Mr. Gregory: I am delighted by the regularity with which my hon. Friend visits York. I hope that he will encourage my right hon. and learned Friend the Secretary of State to visit, not only to see the new headquarters of British Rail Freight but to take the opportunity to explain to British Rail employees the advantages of denationalisation. Will he make clear to them that they would benefit from share ownership in much the same way as their brothers and sisters in British Rail Engineering Ltd.?

Mr. McLoughlin: I am grateful to my hon. Friend and am sure that my right hon. and learned Friend the Secretary of State would welcome the opportunity to visit York to explain the advantages of privatising British Rail.

Mrs. Dunwoody: When the Minister visits York, will he talk to the workers of BREL, who will explain to him how those of them who have been there for 25 or 26 years are losing their redundancy terms each year that they retain their membership of the new company, while new directors are being given enormous benefits? Will the Minister try to understand that, far from being an advantage to workers, privatisation will mean enormous job losses, worse conditions and much lower redundancy payments when employees lose their jobs?

Mr. McLoughlin: I need not go to York to meet workers of BREL because I often meet them in my constituency. We believe that they are in a far better position in a privatised company than they would have been, had the company continued to be a subsidiary of British Rail, and most of the workers believe that, too.

Light Rapid Transit Systems

Mr. Andrew Mitchell: To ask the Secretary of State for Transport what is Government policy on assistance for further light rapid transit systems.

Mr. Freeman: We are prepared to grant-aid worthwhile light rail schemes subject to the availability of resources. In the past two years we have approved Manchester metro link at £120 million and South Yorkshire supertram at £230 million.

Mr. Mitchell: Will my hon. Friend bear in mind the considerable benefits that will accrue to my constituents and the many other people who live in the greater Nottingham area from a Nottingham LRT? Will he also


bear in mind that the project being developed there represents genuine participation between the private and the public sectors, which deserves full Government support, not only after a Bill is put before the House but, before that, during the project's development?

Mr. Freeman: I am grateful to my hon. Friend. We welcome the participation of the private sector in transport schemes—for example, the docklands light railway and the Jubilee line. The light rail schemes, in Nottingham and Bristol, are to be welcomed. They ensure that projects funded by the public purse are much more likely to proceed.

Mr. Snape: Given the Secretary of State's recent and much-publicised conversion to the principle of support for public transport, particularly rail, would it not be a good idea for him to implement what are at present only ideas and give the go ahead to the midland metro? That would contribute enormously to the reduction of congestion in the Birmingham-West Bromwich-Wolverhampton corridor.

Mr. Freeman: I am grateful for the hon. Gentleman's support for that scheme. His views sit uncomfortably with those expressed by his colleague, the shadow spokesman for transport, on light rail schemes in general. The Government believe that once exercises are concluded on sensible propositions—including, on the face of it, the one for the west midlands—and if resources are available, they will be funded.

Oral Answers to Questions — DUCHY OF LANCASTER

Official Visit

Mr. Simon Coombs: To ask the Chancellor of the Duchy of Lancaster when he next intends to visit the Duchy to discuss with tenants the income of the Duchy.

The Chancellor of the Duchy of Lancaster (Mr. Chris Patten): I very much look forward to my next visit to the Duchy. However I do not expect to discuss Duchy income levels with tenants.

Mr. Coombs: Does my right hon. Friend share my concern that, at a time of steadily reducing interest rates, tenants in the Duchy who are small business owners are faced with increases in the amount they have to pay for bank loans? Has my right hon. Friend received any representations on that matter from tenants in the Duchy? Does he have any ideas to put before the House, now or in future, that might alleviate the problems of small businesses?

Mr. Patten: I shall certainly draw my hon. Friend's views to the attention of my right hon. Friend the Chancellor of the Exchequer, who was able to offer a few views on that important subject on a well-known television programme yesterday morning. I am sure that ray right hon. Friend, were he at the Dispatch Box, would say that in the implausible event of a Labour Government, interest rates would be a great deal higher due to the risk premium of socialist policies.

Mr. Burns: To ask the Chancellor of the Duchy of Lancaster when he next proposes to visit the Duchy on official business.

Mr. Chris Patten: I have no plans to visit the Duchy estates in the immediate future.

Mr. Burns: I am grateful to my right hon. Friend for that reply. When he draws up his programme for future visits to the Duchy, will he specifically include a visit to Ribble Valley and, once there, judge the extent—although I accept that it will be extremely difficult for him—to which voters are more aware of Liberal Democrat policies?

Mr. Patten: As my hon. Friend knows from his successful experience in Chelmsford, very few people seem to know what Liberal Democrat policies amount to, as that party customarily stands for a sort of a sanctimonious popularism, which means that its members are in favour of whatever they think is immediately popular on the side of town where they are standing for office. I hope that more people in the Ribble Valley, as elsewhere in the country, will now know that two things for which the Liberals certainly stand are higher income tax and a 50 per cent. cut in our defence programme.

Dr. Cunningham: When the Chancellor of the Duchy goes to the north-west, will he accept that people there are far more at risk from the failed policies of the Conservative Government than from anything that the Liberal Democrats may have to offer? Will he tell those in the north-west—the 8,000 people who lost their jobs in April alone, the 745 companies which went into liquidation in the first three months of this year and the 606 companies that went bankrupt this year—whether he shares the view of the Chancellor of the Exchequer that that is a price well worth paying?

Mr. Patten: I would certainly point out to anyone in the north-west to whom I was fortunate enough to speak that there had been a 16 per cent. increase in the number of businesses in the north-west since 1979. I should also point out that unemployment would be higher if there were such a thing as a Labour Government, because of the national minimum wage—a well known fact. I would also point out that interest rates would be higher because of the risk premium of a Labour Government, and that taxes on everyone would be a great deal higher too.

Mr. Viggers: To ask the Chancellor of the Duchy of Lancaster when he next expects to visit the Duchy to meet tenants and employees to discuss the taxation and income of the Duchy.

Mr. Chris Patten: I shall be meeting Duchy tenants next month, although, as I said earlier, I do not envisage discussing taxation or Duchy income levels.

Mr. Viggers: I am grateful to my right hon. Friend. When next he has a chance to move as a popular Chancellor among his grateful tenantry does he anticipate receiving from them expressions of concern of the sort that I receive in my constituency about the fact that it is now official Labour party policy to cut defence expenditure by about £9 billion—and that that is likely to cost thousands of jobs, including thousands of jobs in Lancashire?

Mr. Patten: My hon. Friend is of course entirely correct to point out that Labour party conferences have consistently voted for cuts of one third in our defence budget. I understand that they would amount to about £9 billion. We know very well that Labour's cuts in our


conventional defences, as well as its unilateralism, would lead to job cuts in the north-west and elsewhere in the country and to the undermining of our security.

Oral Answers to Questions — PUBLIC ACCOUNTS COMMISSION

Certification Audits

Mr. Tony Banks: To ask the Chairman of the Public Accounts Commission how many certification audits were carried out by the National Audit Office in each of the past two years.

Sir Peter Hordern (on behalf of the Public Accounts Commission): The National Audit Office certified 466 accounts in 1989–90, and 463 in 1990–1.

Mr. Banks: The National Audit Office is obviously working hard and extremely efficiently, and on behalf of the whole House we should like to thank it. Am I correct in saying that it also examined the social security accounts, paying particular attention to computer technology and the assessment of income support? Is the hon. Gentleman aware of the great deal of suffering that underestimating or overestimating income support calculations inflicts on the clients of the DSS? Will he have a gentle word in the ear of the Comptroller and Auditor General and suggest that he looks again at the use of computers in the Department and perhaps that he comes to my constituency, to the DSS office at Jubilee house, to see how inefficiently the computer system there is operated?

Sir Peter Hordern: I am sure that the Comptroller and Auditor General does examine the accounts to which the hon. Gentleman has referred. However, these matters are more properly within the province of the Public Accounts Committee than within that of the Public Accounts Commission; but I am quite certain that the Comptroller and Auditor General will take note of what has been said.

Mr. Campbell-Savours: Does the hon. Gentleman think that the recommendations of the Procedure Committee, which I strongly oppose, to widen the remit of the National Audit Office so that it has to report to Select Committees will prejudice the work done by the NAO on certification and the relationship that it has with Government Departments, which is very much based on trust? That trust might be endangered if the work of the NAO is drawn into the political haranguing that may sometimes occur in Select Committees.

Sir Peter Hordern: The Public Accounts Commission has not yet considered that matter, although we may do so. I should greatly regret anything that diminished the authority or role of the Comptroller and Auditor General or the close association that he has with the Public Accounts Committee.

Mr. Soames: Will my hon. Friend pass on to the Comptroller and Auditor General and to the National Audit Office the gratitude of the whole House for the excellent work that the organisation undertakes? Does he agree that by the structure and content of its reports the NAO has greatly increased, through the clarity of its presentation, the information available to ordinary Members of this House?

Sir Peter Hordern: I am most grateful to my hon. Friend, as I am sure the Comptroller and Auditor General will be. I shall pass on my hon. Friend's remarks.

Dr. Kim Howells: Given the precedent set by the investigations of the National Audit Office into the financial consequences of the sale of the Rover car company, will the NAO be able to examine the results of the horse trading that is taking place to try to capture the Channel 3 franchises of television companies?

Sir Peter Hordern: That will not be a matter for the Public Accounts Commission. I am sure that the Comptroller and Auditor General will examine anything which the hon. Gentleman may care to put to him. I have no authority in the matter.

Oral Answers to Questions — DUCHY OF LANCASTER

Duchy Income

Mr. Jacques Arnold: To ask the Chancellor of the Duchy of Lancaster when he next expects to visit the Duchy to discuss the income levels of the Duchy.

The Chancellor of the Duchy of Lancaster (Mr. Chris Patten): I refer my hon. Friend to the answer I gave some moments ago to my hon. Friend the Member for Swindon (Mr. Coombs).

Mr. Arnold: If my right hon. Friend were to discuss the income levels of the people of the Duchy, would he consider with them the advantages of a Government who have cut personal taxation and who will do so again when that is prudent? Would he compare that Government with a Government formed by the Labour party, the Opposition? Previous Labour Administrations have increased taxation, and a Labour Government would do so again.

Mr. Patten: The other day the Leader of the Opposition said that no one could look to a Labour Government, were there to be one, for tax cuts. I think that that was the understatement of the decade. Under a Labour Government, tax would increase for everyone in work, for all savers, for the thrifty and for the enterprising.

Oral Answers to Questions — HOUSE OF COMMONS

Public Facilities

Mr. Tony Banks: To ask the Lord President of the Council what proposals he has to extend public facilities in the Palace of Westminster.

The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor): The relevant Services sub-committees are currently considering measures to improve further access for disabled visitors and the feasibility of providing refreshments for all visitors in advance of whatever may be included in the design brief for phase 2 of the new parliamentary building.

Mr. Banks: Does the Lord President share my understanding that having a cream tea with a Member on the Terrace is one of the high spots of the London season? It is certainly one of the lesser injuries that we can inflict upon our constituents. Given the appalling weather at present and the tight-fistedness of many hon. Members, it


is clear that a cream tea is not one of the pleasures that many constituents can enjoy. Could not we have a boat moored off the Thames on which refreshments are provided? It would—[Interruption.] This is a serious point. Such a boat would enable members of the public to enjoy the views that we have. Refreshments could be offered not in phase 2 but in the Palace of Westminster itself, perhaps by using Westminster Hall. We are very ready to take hospitality in this place but reluctant to offer it.

Mr. MacGregor: I do not often have cream teas and I rather welcome the rain because we are badly in need of it.
It is generally agreed that it is not possible to provide refreshments for visitors in the Palace itself. I doubt whether Westminster Hall would be an appropriate place for the provision of refreshments. The Catering sub-committee has agreed to commission a feasibility study to determine whether reasonable facilities that are conveniently close to the House can be provided for groups of Members' guests. I know of one location that is being included in the study, and I shall ask the sub-committee to consider the hon. Gentleman's suggestion.

Recycled Paper

Mr. Butler: To ask the Lord President of the Council whether there are any proposals to produce the Official Report on recycled paper.

Mr. MacGregor: This matter was considered by the Accommodation and Administration sub-committee during the previous Session.
The Committee agreed with advice given by Her Majesty's Stationery Office that recycled paper was currently unsuitable for use in producing parliamentary publications, including the Official Report, largely due to the poor archival qualities of this type of paper.

Mr. Butler: I understand the need to retain some Hansards for archival purposes, but most daily reports and most Order Papers are put into the rubbish bin at the end of the day. Is there not a case for reconsidering the use of recycled paper for those parliamentary papers?

Mr. MacGregor: I understand that some libraries use copies of the daily Official Report and other volumes for archival purposes. I take my hon. Friend's point about Vote Papers and Vote bundles. I would guess that they are not used often for archival purposes. I am happy to ask the relevant Committee to take up the matter again and to consider my hon. Friend's suggestion. I am strongly in favour of using recycled paper whenever that is possible.

Mr. Simon Hughes: I thank the right hon. Gentleman for that helpful reply, but two further developments would be welcome. First, will he try to ensure that the amount of paper produced in the House—much of which is wasted internally, let alone externally—is reduced? There is considerable scope, especially in view of the amount of paper left at the end of every day and bundled up in the Vote Office.
Secondly, we are to some extent using recycled paper for correspondence. It is only woodcuts—offcuts—not properly recycled paper. Can we go the whole hog and have fully recycled paper?

Mr. MacGregor: I shall see that the hon. Gentleman's point is considered. As for his first, I share his view that wherever possible we should cut down on the amount of paper that we use. I have often thought that we use far too much in the Vote bundle. The Procedure Committee has examined the matter and made some helpful recommendations. I am keen that it should do more, as I suggested when I met the Committee recently.
Most of the paper that goes into the wastepaper baskets in the House is sent for recycling. Nevertheless, I agree that it is our responsibility to cut down on paper whenever possible.

Official Envelopes

Mr. Harry Greenway: To ask the Lord President of the Council if he has any plans to extend the eligibility of House post-paid envelopes for use by an hon. Member writing to overseas constituents; and if he will make a statement.

Mr. MacGregor: I have no plans to do so. However, my hon. Friend may be aware that the Services Committee has recently approved the use of post-paid envelopes to certain official destinations in Europe and this facility will be available to hon. Members in June.

Mr. Greenway: I thank my right hon. Friend for his reply. I remind him that there are now 400,000 overseas constituents with whom hon. Members need to communicate. I am in constant communication with several of mine. Many of them live beyond the territories of Europe. Is my right hon. Friend aware that they like to receive House of Commons envelopes with the proper embossed heading? Will he find some way of enabling hon. Members to use those envelopes for communications with their overseas constituents?

Mr. MacGregor: It took some time to establish the arrangement that I have just described for certain European destinations, involving an embossed stamp. My hon. Friend has anticipated me. I was going to remind him that for overseas correspondence concerning parliamentary or constituency business hon. Members may use the normal postage stamps and reclaim the cost from the Fees Office against the office cost allowance. That is one possibility open to my hon. Friend, and he can also use House of Commons envelopes for that purpose even if they are not stamped.

Petitions

Mr. Cohen: To ask the Lord President of the Council if he has any plans to introduce a procedure whereby an official response would be presented in respect of all parliamentary public petitions.

Mr. MacGregor: No, Sir.

Mr. Cohen: Does the Lord President realise that more than 900 official petitions submitted last year received the response from the Government, "There is no Government response"? They were not ordinary street-corner petitions; people had to go through a detailed rigmarole to present them to the House. The Government are undermining the British people's traditional right to present a petition to


the House. I would have put this complaint in a petition, but I feared that I would receive the reply, "There is no response".

Mr. MacGregor: The hon. Gentleman is getting a response from me now. Part of the answer is that there are other ways in which constituents' requests—petitions, ideas and views—can receive Government answers, including the usual means of parliamentary questions. The hon. Gentleman is not quite right. The Government gave their observations on 170 of the 960 petitions in the previous Session. Not all petitions are addressed to the Government; they are effectively addressed to the House. I think that it is right to follow the normal practices.

New Parliamentary Buildings

Mr. Simon Coombs: To ask the Lord President of the Council if he will make a statement on progress on phases 1 and 2 of the new parliamentary buildings.

Mr. MacGregor: Phase 1 is now being fitted out and furnished. The part of the building occupied by the House of Commons Library, known as 1 Derby Gate, will open to Members on Monday 17 June. The catering facilities and Members' offices in phase 1 will be ready when the House returns from its summer adjournment. The Services Committee has agreed its initial brief for phase 2 and will report on this shortly to the House. It is hoped that construction work can begin in spring 1992 and the building be ready for occupation in 1996.

Mr. Coombs: I thank my right hon. Friend for that helpful answer. In view of the increasing number of right hon. and hon. Members who will use the accommodation in those two phases, as well as Norman Shaw North and South, will he tell us what is the latest thinking on the provision of a secure access from those buildings into the Palace of Westminster?

Mr. MacGregor: There will be new security arrangements for those buildings and that will apply immediately

in phase 1. Direct secure access to the House from both will have to await completion of phase 2 in respect of completely secure access. The intention is to have secure access when phase 2 is completed.

Dr. Cunningham: Is not progress on providing new and better facilities painfully slow? Does the Leader of the House recognise that an interim solution might be to rent or lease space in existing buildings in the vicinity of the Palace of Westminster? In that regard, would he bring into use the building on the other side of Westminster bridge which was the former headquarters of the Greater London council? That building could be put to effective use for hon. Members, their staff and visitors. Would he also bring that building into a proper state of maintenance so that a a new London authority can reoccupy when we have a Labour Government?

Mr. MacGregor: First, as the hon. Gentleman knows, I am as keen as anyone to see progress on the provision of better facilities for hon. Members. There will be 65 Members offices in phase 1 which is coming in shortly. There will be another 25 Members offices as the Serjeant at Arms, the deputy Serjeant at Arms and Mr. Speaker's secretary vacate their present residences. That is a step forward.
To some extent phase 2 is involved with the Jubilee line and the changes to Westminster tube station for which a Bill is currently before the House. That complicates the issue. However, that is moving ahead and we are looking at alternative arrangements for moving people out as the changes take place from existing buildings across the road in Bridge street and also more generally. As the hon. Member for Copeland (Dr. Cunningham) is aware, I am currently considering additional facilities in the nearby vicinity. I do not believe that county hall is appropriate and I would certainly not be happy to see money spent to facilitate the return of the GLC which is the last thing we want for London.

Business of the House

The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor): With permission, Mr. Speaker, I should like to make a short statement about the subjects for debate on Wednesday and Friday of this week.
WEDNESDAY 5 JUNE—Opposition day (12th allotted day). Until about 7 o'clock, there will be a debate entitled "The government of London", followed by a debate entitled "Training cuts and the unemployed". Both debates arise on Opposition motions.
FRIDAY 7 JUNE—There will be a debate entitled "Nationalisation, denationalisation and renationalisation", on a motion for the Adjournment of the House.
In addition, at the end of tomorrow, there will be Ways and Means resolutions relating to the Finance Bill.

Dr. John Cunningham: I am grateful to the Leader of the House for that statement. It is helpful to the House to know the subjects for debate on Wednesday, as they could not be announced before the recess. When the Minister replies to the debate on London, will we hear whether the Government have any policies or ideas for the better government of our capital city? Is it too much to hope that, in the second half of our Supply day on Wednesday, we shall have an explanation from the Ministers about the disastrous and inexorable increases in unemployment, and discover whether they share the view of the Chancellor of the Exchequer that the disastrous level of unemployment is "a price worth paying"?

Mr. MacGregor: With regard to the first debate, I am sure that my hon. Friend who will deal with the debate will make clear the Government's constructive policies for London—which will not, unlike the Opposition's policies, include the return of l he unlamented Greater London council.
The second debate is fundamentally about training. I have no doubt that my right hon. Friend who will speak in that debate will make clear the much greater expenditure on training and emphasise the increase in the number of training places for young people under this Government and at the present time compared with the position under the Labour Government. No doubt he will also stress, as the Financial Times reported this morning, that Labour's minimum wage policy would
reduce the incentive both for workers to train and for employers to train them.

Several Hon. Members: rose—

Mr. Speaker: Order. I remind the House that this is a narrow statement about this week's business. It should not range wider than the two debates in question.

Mr. Graham Riddick: Will my right hon. Friend confirm that on Friday it will be appropriate to debate the recent Aims of Industry document which calculated that Labour's renationalisation programme would cost the taxpayer about £7 billion per annum? Does my right hon. Friend agree that countries throughout the world, even those in eastern Europe, have now rejected the dogma of nationalisation to which the Labour party is still wedded?
Mr. MacGregor: It will be entirely appropriate to discuss those matters on Friday. Labour has put forward at least three major renationalisation proposals and the debate will be another example of how Labour's tax and expenditure pledges simply do not add up. My hon. Friend is right to say that a very big cost is attached to those commitments.

Mr. Ted Rowlands: Will the Leader of the House arrange for the Secretary of State for Wales either to intervene in Wednesday's debate or to make a statement about the increasing jobs crisis facing the valley communities, especially my communities in Merthyr and Rhymney, where during the recess there was an announcement about the closure of the Thorn lighting plant, which has been with us since 1947? On top of that, there have been 300 redundancies at Hoover and the deep navigation colliery in Treharris has closed. Will the Leader of the House make sure that the Secretary of State explains to the House how his valleys initiative will be bolstered to deal with our growing jobs crisis?

Mr. MacGregor: As the hon. Gentleman knows, Wednesday's debate will last only three hours, and so that those who wish to take part can do so, there will be a limit on the number of Government spokesmen. I shall draw the hon. Gentleman's general points to the attention of whomever will speak for the Government.

Mr. Tony Marlow: Perhaps my right hon. Friend could take himself back to the interesting suggestion by the hon. Member for Copeland (Dr. Cunningham) that we should decant a few Opposition Members into county hall. If that were done and Opposition Members got their feet under the table there, there would be no risk whatever of the return of the Greater London council.

Mr. MacGregor: That would depend on which Opposition Members were there, but I recall that some Opposition Members who were in county hall engaged in massive empire building and in a great deal of unnecessary expenditure for the people of London.

Mr. Simon Hughes: May I ask the Leader of the House to tell his colleague who will speak in Wednesday's debate on London matters that one of the issues about which Londoners most want to hear in the context of the Government's policy for the remainder of this Parliament is what they will do properly to house people in the capital city? What will they do to remove more and more people from the streets, to stop rents escalating out of control, the regular repossessions—

Mr. Speaker: Order. Such matters would be much more appropriate for Wednesday's debate. We have three more statements to come. I ask hon. Members to ask questions and not to make statements.

Mr. Hughes: Will the Minister make sure that his colleague deals with these issues on Wednesday and gives some positive answers and statements?

Mr. MacGregor: I am tempted to answer that myself, but I shall bear in mind what you have said, Mr. Speaker, and simply say that the Minister will deal with those matters in the debate.

Mr. Peter Bottomley: Does my right hon. Friend agree that the debate will provide an opportunity to


test the Opposition's priorities, given that the Leader of the Opposition will not say whether a Labour Government would spend more money on health? They want renationalisation and they will either confiscate or say that there is a great priority and will take shares away from pension funds and individuals rather than bolster the public services. May we also check that the nationalization— —

Mr. Speaker: Order. That would be interesting for Friday's debate, but I think that the hon. Member has asked his question.

Mr. Bottomley: On the priorities of nationalisation, if we are told by the official spokesman for the Opposition— —

Mr. Speaker: Order. It is unfair to ask more than one question. The hon. Gentleman is overdoing it.

Mr. Bottomley: Such a programme would cost the country too much.

Mr. MacGregor: I am sure that my hon. Friend is right that the Labour pledges involve massive expenditure, which would have to be financed at the expense of the taxpayer and of the priorities that we believe to be right.

Mr. Harry Cohen: The Leader of the House said that, in the debate on London, his ministerial colleague would outline the Government's constructive proposals. In that case, he will not have anything to say.

Mr. MacGregor: Nor have I, because that is a very empty suggestion.

Mr. Richard Holt: Has my right hon. Friend received any request from the Opposition—who have been loud in saying that they want to discuss the proposed possible merger or takeover of ICI, but, when given an opportunity to debate it on an Opposition day, have run away from doing so?

Mr. MacGregor: The Opposition have chosen the two subjects that they have for Wednesday, and both choices are theirs.

Dr. Norman A. Godman: Will the Leader of the House confirm that a Scottish Office Minister will wind up the second of Wednesday's two debates? Would that not provide him with an opportunity to explain to Scottish Members of Parliament the circumstances surrounding the current threat of the closure of Ravenscraig, Scotland's deepening unemployment crisis, and the failure of the Scottish office to provide training, especially for those who are physically and mentally handicapped? That is now a scandal in Scotland, and we should have a statement about it.

Mr. MacGregor: Wednesday's debate will inevitably be short, and I cannot at this stage say which Minister will wind up the debate to which the hon. Gentleman refers.

Mr. Harry Barnes: Will the right hon. Gentleman explain what he meant by the ways and means resolutions to which he referred?

Mr. MacGregor: That is a fair point. The ways and means resolutions relate to amendments and new clauses passed during the Committee stage of the Finance Bill. They cover a number of matters, and I would be happy to advise the hon. Gentleman what they are. In any event, they were matters dealt with in Committee.

Agriculture Council

The Minister of Agriculture, Fisheries and Food (Mr. John Selwyn Gummer): With permission, Mr. Speaker, I wish to make a statement about the 1991 settlement of farm prices reached at the meeting of the Agriculture Council, which finished on 24 May. I was supported at that meeting by my hon. Friend the Member for Skipton and Ripon (Mr. Curry), the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food.
I am happy to state that this year's agreement met a number of important United Kingdom objectives. In particular, despite pressure from 10 member states in that council and in the Finance Council, no increase was made in the agricultural guideline for 1991 or 1992. The Commissioner formally confirmed that the package agreed contained sufficient economies for expenditure to be contained within the guidelines already set. That success is an important one, in that the integrity of the 1988 budget decisions has been successfully defended from a sustained attack by those who wish to weaken them. You may remember, Mr. Speaker, that in debates in the House, it was widely felt that that was not an obtainable objective, although the whole House hoped that we could reach it.
That outcome has been achieved by economies in a number of areas. There will be reductions in effective support prices for milk, beef, sheepmeat, oil seeds, proteins, and tobacco. In addition, there will be an increase in the cereals co-responsibility levy to 5 per cent. —although for those participating in set-aside schemes, that will be refunded in whole or in part. Also, there will be a decrease in milk quotas by 2 per cent. There are different options for achieving that. Producers will be compensated in some measure, either financially or by the allocation of quota obtained from a buy-up scheme.
In general, those changes are necessary and welcome, although I have continued to press for the cereals co-responsibility levy to be replaced by price cuts, as such cuts enable other farmers to buy their products at a reduced price, and therefore increase the market for the produce. There will be a new, one year set-aside scheme financed by the Community. The details are such that there ought to be a real incentive for take-up in all member states. One of my criticisms of the existing scheme is that take-up has been uneven in the different member states. I am not prepared to see large areas of Britian set aside so that other countries can increase their production.
I secured the addition of an environmental component to that new scheme. If the relevant environmental requirements are not met, payments will be reduced. That is a major change of policy, and one about which I am particularly pleased. That major step provides us with a basis for the discussions that will take place on the wider reform of the common agricultural policy.
It was agreed that African, Caribbean, and Pacific sugar supplliers will be compensated for the price reduction agreed in 1989. That will be welcome to the countries concerned, although I continue to believe that there are better ways of serving their interests.
The European Court has decided that quota must be found for certain producers who previously gave up milk production for a period. This is known as the Slom problem. Whatever its reservations, the United Kingdom naturally accepts the court's ruling. I do not believe that

they are the most deserving producers, but we are a law-abiding country and must accept what the court has said.
We have insisted, however, that the extra quota must be found, to the fullest extent practicable, from the Community reserve. As a result, all the remaining Community reserve will be put out in proportion to previous allocations for Slom purposes, which will ensure that the United Kingdom receives the largest share.
For our farmers, the most important decision was to align the green pound with the market rate applicable from 27 May. This brings the green rate very close to our central rate in the ERM and means that, for the first time for many years, our farmers will be able to compete on equal terms with those elsewhere in the Community. I am sure that the House will welcome that achievement, and I am pleased to be the Minister able to announce it.
The position of producers in less favoured areas is further protected by an increase in the supplement to the ewe premium, which will compensate them for the reduction in the sheepmeat basic prices.
The impact of this outcome on United Kingdom producers depends in part on decisions yet to be taken, but it seems probable that the change in the green pound will largely outweigh the effect of the various economies in the different sectors. Producers in most other member states will not be able to benefit from green currency changes. The settlement will add about one tenth of 1 per cent. to food prices. I commend this outcome to the House.

Dr. David Clark: May I say how pleased Labour Members are that the Minister was able to come back with his decision on the agrimonetary measures? We think that the abolition of the differential with the green pound is a step in the right direction, and at least it allows British farmers to compete on equal terms with their overseas competitors.
Apart from that, this price report is, in essence, a holding report. It is a non-event, bearing in mind the fact that the Commission has a record beef surplus, a surplus of milk and too many cereals. We found little in the price support that will help those long-term problems.
The Minister rightly said that he was pleased that the settlement had been made within the price guidelines, and so are we, but I do not think that the budget guidelines are as clear as they first appear. Will the right hon. Gentleman concede that the result of the statement is that, this year alone, total budgetary expenditure on the CAP has increased by more than 13 per cent.? Will he also concede that there has been much manipulation of the budgetary guideline and a transfer of farm spending across the financial years 1991 and 1992? Does he agree that, by recalculating the dollar effect, the EC has managed to find an extra 300 mecu this year, and an estimated 1 becu to 2 becu next year? What contingency plans are there if the American dollar weakens, because if that happens the budget guidelines have been breached?
The Minister made great play of his new one-year set-aside scheme. Will it be a 12-month only set-aside scheme or the first of a series of schemes whereby farmers enter into a 12-month agreement to set aside their land? If that is so, does not it rather unfairly treat farmers who have already agreed to a five-year set-aside scheme? Has he any plans to deal with that?
Will the Minister confirm that the environmental component of the new scheme, which he lauds, is simply a


vegetation growth on the land? Will he further confirm that, if this relevant environmental requirement, as he called it, is not met, farmers will lose a mere 10 per cent. of the grant? It seems to us that this is merely tautology, and not a genuine environmental scheme.
Why does the Minister think that the new scheme will work when it is plain that the old five-year set-aside scheme has not worked? There was a marginal decrease in cereal production, but farmers set aside their more marginal land and, with increased productivity, maintained their cereal output.
Are there provisions in the agreement for individual national Governments to top up any of these schemes? Has the Minister any proposals to top up his set-aside scheme, or does he intend to leave it at £50 an acre plus a rebate and co-responsibility levy?

Mr. Gummer: I thank the hon. Gentleman for his kind words about the agrimonetary activity. I am surprised that he did not point out that we were offered a third of what we got. We got the whole of it, which is more than most people thought possible.
I am surprised that the hon. Gentleman called this a non-event and went on to talk about beef, where we have recast the system in a remarkable way, and about milk, where we have cut quotas by 2 per cent. I wonder what kind of price cuts or quota cuts the hon. Gentleman would have proposed. I hope that, the next time he is invited to meet a farming audience—I had hoped to hear answers to some of his questions—he can explain what cuts in the milk price and in the quota he would propose for a country that is only 88 per cent. self-sufficient in butter fat, as Britain is at present.
It is true that the budget has increased, just as it decreased in previous years. That is understandable in the circumstances.

Mr. D. N. Campbell-Savours: What about the 13 per cent.?

Mr. Gummer: The hon. Gentleman talks from a seated position about 13 per cent. I hope that he will explain to his farmers whether he would have liked the budget to be cut by 13 per cent. His farmers will be interested in that, because they are among the farmers whom I have spent a lot of time protecting, the cost of which is included in that 13 per cent. No doubt the hon. Gentleman will speak for himself later.
Of course, the European Community has taken into account the changes in the parity value of the dollar. I should have been in considerable difficulty at the Dispatch Box if the dollar had moved in the opposite direction and the hon. Member for South Shields (Dr. Clark) had said that we had not taken that into account and that we did so only when it seemed to suit our case. We take into account the latest possible movement, what has happened and what is likely to happen.
If the dollar were to move in the opposite direction, the Commission would have to take management action to keep the settlement within the guidelines, because the guidelines have that effect. For that reason, we were determined to keep the guidelines as they were. I hope that the hon. Gentleman recognises that two countries won and 10 countries had to back down on that issue. That shows

that, if one is determined to fight within the Community as an enthusiastic member of it, one can achieve what one wants to achieve.
The set-aside scheme is a 12-month scheme. I should like it to be clearly stated, rather than opaquely mentioned, that this was a precursor not to an annual scheme but to an extension of set-aside in the direction for which the United Kingdom has fought for many years. After all, the set-aside scheme was an invention of my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling), who has made this case for a long time. I am pleased that what we have found to be successful in Britain will now be seen to be successful in the Community as a whole.
The hon. Member for South Shields talked about the lack of success. What did he want me to do? Did he want me to provide for more set-aside in this country than in other countries—so that, for example, the French could expand their production while we lost our markets? If that is the Opposition's official policy, it is all of a piece with advocating eating New Zealand apples and opposing eating British sausages. We now know exactly what the Opposition's view is—it is to cut prices to the British and to give more opportunities to our competitors.
As far as the environmental compensation is right, it is true that at the moment there is a need merely to have vegetative cover, to look after the land, to grow the crop and to plough the crop afterwards. That sets a standard that is the lowest level, but it is very different from not having an environmental requirement at all. Previously, set-aside could easily be characterised—I fear that the hon. Gentleman has sometimes been guilty of appearing to characterise it as such—as paying the farmer to do nothing, which is wholly unacceptable. We need to pay the farmer to look after the land—that is part of his traditional role, and something on which I intend to insist as part of Common Market agricultural reform.
The five-year scheme is important, and those who are involved in it will be able to be excused the 2 per cent. extra co-responsibility levy which has been added this time. This was a United Kingdom precondition. Part of the reason why the debates have continued for so long was that I was not prepared to agree to a set-aside scheme which set at a disadvantage those who had already accepted the restrictions.
The fact that many people have set aside their least good land does not seem to be a disadvantage. Set-aside has meant that the expansion of production has been less than it would otherwise have been. The Opposition must come to terms with the fact that, if one wants to reduce over-production, the only sensible way to do so rapidly without so distorting the market as to have long-term disadvantages is to have a major set-aside scheme that covers the whole of the European Community and which is not merely a means of attracting people into it in this country and in Germany.

Several Hon. Members: rose—

Mr. Speaker: Order. I appreciate the importance of this statement to hon. Members with agricultural constituencies, but I remind them that there are two other statements. Therefore, I ask them to put brief questions to the Minister on this statement.

Mr. Robert Boscawen: Does my right hon. Friend accept that, despite the very difficult


budgetary constraints, he has preserved the position of British farmers to a large extent and has ensured that their disadvantages are outweighed by the advantages over the green pound? Will he give some guideline on how the 2 per cent. reduction in the quota will be phased? Will he take it from me that he has met his commitment by reducing the size of the quota by an amount that the British farmer can withstand?

Mr. Gummer: I thank my hon. Friend. The quota will be subject to a compensatory payment, and we shall have to buy out that 2 per cent. on a compulsory basis, but there will be compensation. The Slom quota is more difficult, because we still have to calculate how many will require the money. There are problems with the European Court judgment which we shall have to sort out, but I am pleased to say that we shall not only have the money from the European Community reserve; we shall also be able to retain the money that we had for the first Slom pay-out in order to apply that to this one. That means that the buy-out programme will be less extensive than it would otherwise have been.

Mr. Robert Maclennan: Does the Minister realise that the settlement will be judged in rural communities by its impact on farm incomes, on the rural economy and also on the countryside? Does he accept that farmers who are under great pressure will not take complete satisfaction from the continuing downward pressure on prices which the settlement will bring and which may be—this would be welcome—at least partially offset by this alignment of the currency with the central rate?
The Minister deserves congratulations on that. However, does he acknowledge that the emphasis on set-aside may lead to as many as 250,000 hectares being taken out of farm production, if the Minister's figures on take-up are true? Does that constitute long-term assistance to the maintenance of the countryside, which the people of this country like?

Mr. Gummer: Those of us who care about the countryside should not only ask questions but give some idea of the answers to the problem. The hon. Gentleman has counted out price pressure and set-aside. It is difficult to see what the hon. Gentleman proposes, except perhaps that we should continue to increase our spending while finding that the farmer does not get a sufficient proportion of that spending.
I very much hope that the hon. Gentleman will support me in my battles to get the common agricultural policy reformed, so that more of the expenditure gets to the farmer, so that the farmer can be compensated for his work to look after the countryside, so that we can get more money into the most difficult areas, so that we can help the farmer to market his products more effectively and so that the farmer can get a higher proportion of the added value. That is a policy to deal with the problems. The hon. Gentleman is proposing the usual thing from the Liberal Democrats, which is never to give a proper answer to anything, but merely to complain about everything that everybody else does.

Mr. David Harris (St. Ives): Will my right hon. Friend accept congratulations, especially on the elimination of the unfair disadvantage that our farmers have faced over the green pound? Now that this difficult round of price fixing

is over, does my right hon. Friend think that the time is right to give agriculture a sense of direction? Would he consider publishing a White Paper or some other document in which to set out how the Government see the future of our agriculture?

Mr. Gummer: My hon. Friend is kind in his congratulations. I made clear the directions in which I should like the common agricultural policy to be reformed. I am sure that my hon. Friend agrees that when more than 80 per cent. of spending on agriculture comes from decisions made in Brussels by the Community as a whole, the future of agriculture depends centrally on the decisions that we shall make over the next six months, as well as on agreement under the general agreement on tariffs and trade.
I will consider my hon. Friend's proposal. There may be ways in which we can make even clearer the Government's commitment not only to farming, but to the five points of major change for which we look. The fact is that the decisions are yet to be made. I understand that farmers in those circumstances, are looking anxiously to see what decisions will be made under the Dutch presidency.

Mr. Ron Leighton: Is it not true that the whole of the common agricultural policy is a complete and utter monstrosity? Despite all the chatter about reforming it, which we have been hearing for as long as anyone can remember, it is getting worse.
The Minister will have heard of the principle of subsidiarity—that things should not be done at Community level which could be done better at national level. Will he please press for the whole of British agriculture to be dealt with under the principle of subsidiarity, so that we can repatriate agricultural poky back to the House? Surely we can make a better fist of it than the shambles in Brussels?

Mr. Gummer: I do not believe that the hon. Gentleman has ever asked me a question complaining about his constituents' shortage of food. He has never asked me such a question because of the success of the common agricultural policy. The hon. Gentleman should be ashamed of himself, because he is speaking with a full stomach and complaining about the system that has made that stomach full. He must accept that we are trying to change a system that was extremely successful at a time of shortage to one that can deal with a time of surplus, part of which it has created in seeking to solve the problems of post-war Europe.

Mr. Kenneth Hind: My right hon. Friend is to be congratulated, particularly on his achievement on the green pound. He will know from visiting my constituency on several occasions that I represent the largest piece of grade 1 farmland in the north-west of England. His set-aside policy will be welcomed by my farmer constituents, but will my hon. Friend give me an undertaking that he will consider setting aside the poorer land first, before he sets aside the grade 1 farmland where the most productive farms are placed?

Mr. Gummer: My hon. Friend asks a proper question. I want set-aside to be voluntary, so that farmers make their own decisions about which land to set aside. The level will be fixed to draw out of the system sufficient land to deal with surpluses. However, although I want set-aside to be voluntary for farms, I believe that there should be some


compulsion for nations. Again, I wish to see a system with a target for each member of the European Community, so that we all share the burden, instead of some being prepared to pick it up more readily than others.

Mr. Andrew Welsh: Does the Minister accept that farmers are anxious to know how the details of the proposals will affect them? When and how will he announce the details, particularly as they affect the milk and cereals sectors? Will he, for example, state what the basic set-aside payment will be? What effect does he expect the proposals to have on farm incomes in Scotland?

Mr. Gummer: Several of the details are being worked out at this moment in the management committees. As soon as I have them, I shall make them as widely available as possible. If the hon. Gentleman has any worries about their availability, I hope that he will tell me. I shall seek to make up for any problems that arise. I shall certainly give the hon. Gentleman as much information as I possibly can.
On set-aside, the level at which the Community gives its support per acre, plus the advantage of not paying the co-responsibility levy on the rest of the farm's production, seems adequately to meet the needs of set-aside for this country. Indeed, I was worried about and refused to support one proposal that was on the table during part of the negotiations, which would have made set-aside less attractive in some countries than others. Once again, the United Kingdom would have found itself bearing the burden. I was not prepared to accept that.
Part of the reason why we fought on for many more hours was to obtain equal treatment. Therefore, I am not prepared of my own volition to change the equality of that treatment. We want to have a balance throughout the Community. Anyone who proposes the repatriation of agricultural policy does not understand how international the trade is, how impossible such a repatriation would be and the fact that it would lead to one country bidding against another. Therefore, the suggestion should be dismissed out of hand.

Miss Emma Nicholson: I congratulate my right hon. Friend the Minister on creating a level food production field for the British farmer, but can he explain why, although British sheep may safely graze, the British sheep farmer must wait until 1993 for parity with the European sheep farmer?

Mr. Gummer: Of course it is difficult for the sheep farmer, but these matters are dealt with by marketing years. The United Kingdom Government have supported that, and in the past the system has often been to the advantage of the United Kingdom producer. I fear that, having enjoyed the advantages of stability within the system and the way in which the system had become a manipulable arrangement, it would be hard for us to demand—although we asked—that the marketing year should be changed.
My hon. Friend referred to sheep safely grazing. I hope that the changes that we have announced, which include speeding up alterations in the way in which the premiums work, will mean that we shall obtain even more of the European market for the best sheepmeat in the world.

Mr. Andrew F. Bennett: Is there anything in the package to help sheep farmers in the mountain areas who are stuck with keeping mountain breeds of sheep? In the past two years, the price that they have obtained for the wool clip has been extremely low. Many such farmers are in doubt this year about whether it will be economic to shear their sheep. Can the Minister give any encouragement to farmers to carry out that practice? It would be cruel to the sheep not to shear them, and it would leave the countryside in a horrible state. I am sure that the Minister is aware that the price that farmers are likely to obtain for the wool will be low this year.

Mr. Gummer: I understand the hon. Gentleman's point. The problem for the livestock industry has been especially severe. Not only sheep prices but beef prices have been low. Therefore, farms which usually relied on the success of one product when the price of the other fell have found that the prices of both products have fallen at the same time. That is why I was pleased to see a 4 ecu supplement per ewe for farmers in the less favoured areas, which will give them added support. As the hon. Gentleman knows, the Government's policy on those matters over which we have control, such as HLCA payments and suckler cow payments, has been to try to aim extra help at the most difficult areas. I shall continue to do that.

Mr. Andy Stewart: My right hon. Friend will be pleased to hear that getting rid of the iniquitous green pound will cause rejoicing in the countryside and that there is great interest in the one-year set-aside. Will he confirm beyond doubt that the refund on the cereal levy will cover the remaining crops and not be equivalent to the 15 per cent. set-aside? Will he confirm that the environmental cover crop on the set-aside does not cover the one-year rotational fallow, which is environmentally friendly in as much as the following crop requires a reduced input of fertilisers and pesticides?

Mr. Gummer: My hon. Friend will be pleased to know that the Government included the environmental set-aside not because we felt we needed it ourselves—we would have continued our own policy on that front—but because we wanted a common attitude throughout the Community so that farmers who set aside in the rest of the Community face the same costs as farmers in this country.
I shall consider the problems of continuing fallow where it is suitable, and I shall give my hon. Friend an answer as soon as I have one. I think that he will find that it is to his satisfaction. On the 15 per cent. set-aside, the cut in the co-responsibility levy is for all the rest of the cereal crop.

Mrs. Gwyneth Dunwoody: The Minister has acknowledged that the European Court decision will cause real difficulties to producers who took up quota when other producers went out of production. Will he guarantee that those producers will not suffer further cuts because of subsequent arrangements? If one takes account of the inclusion of yoghurt and milk products in the existing quota, it is clear that working farmers are already at risk from extra cuts across the board.

Mr. Gummer: I am pleased that the hon. Lady agrees that there are complications with Slom which none of us wanted or wished to face. However, we must face up to them and the major problems are now clear. We have dealt


with the primary part of those problems, even though we still have to deal with the secondary part. Little else can emerge, although one hardly likes to say that of such a contentious issue. We will be able to pay an important proportion of the increase to producers from the extra quota we receive from the Community, which either way increases the British quota, if not by as much as I should like, at least significantly and importantly.
In addition, we will need a buy-out scheme for that part of the quota which it is necessary to redistribute. Nobody will have a special disadvantage, but the fact that the scheme will be in operation will mean movement of quota from some people to others. I hope to make that as voluntary as humanly possible.

Mr. David Nicholson: As a result of the Government's commitment to the European Community and my right hon. Friend's typically robust defence of British farmers' interests, he has returned from Brussels with a fine settlement on the green pound. He will be aware that many farmers are concerned about the uncompetitive pressures on their livelihoods from European farmers. Will my right hon. Friend therefore continue his efforts to eradicate any points of unfair competition that damage our national interest? Will he persevere in defending our countryside, especially the less favoured areas such as Exmoor and the Brendon hills, in my constituency?

Mr. Gummer: My hon. Friend never leaves me the opportunity to forget the Brendon hills or Exmoor; other hon. Members remind me of other places. I hope that those who represent urban constituencies recognise the degree to which a healthy farming industry is essential if the countryside is to be protected and cared for. I am sad that some colleagues seem to think that we can do without farmers because, somehow or other, the countryside will look after itself.
I am pleased to say that the advantages that we have gained from that price settlement set the scene for the arguments, which will be very tough and difficult, about the reform of the common agricultural policy. The environment must increasingly be one of the triggers of a common agricultural policy rather than an add-on extra, largely financed by Governments, as is presently the case.

Mr. Jonathan Aitken: I congratulate my right hon. Friend on bringing back from Brussels a better than expected deal for British farmers. However, may I counsel him against gilding the lily of the common agricultural policy, as he seemed to be doing a moment ago? Will he confirm that the CAP still costs the average British family approximately £18 a week and that that figure is rising because agriculture expenditure is increasing by some 13 per cent. a year, even after all the creative accountancy conjuring tricks so beloved by the commissioners in Brussels? What is being done about the longer-term solutions—in particular the admirable MacSharry proposals, which may have put an end to those proposals?

Mr. Gummer: I hesitate to disagree with my hon. Friend, but, having asked such a question, he cannot expect unanimity. When speaking of creative accountancy, from whatever source, we must not pretend that world prices are real. They are simply the dumped prices of countries that support their agriculture, many of which do so to a greater degree than that achieved by the common

agricultural policy. Therefore, any figures based on comparisons of what we pay for our food and what could be paid by a small number of people buying dumped food at the lowest possible price, have no meaning whatsoever.
Although I, as much as anyone else in the House, want a thorough reform of the common agricultural policy, that reform will not be achieved by suggesting to the British people that we can guarantee our future supply of food, ensure that the majority of our farmland can continue to be farmed, and care for the countryside, especially the most vulnerable areas, without paying some money for it. Even after common agricultural reform, major costs will be incurred in ensuring that we have the environment that we deserve.
I would not describe MacSharry's original proposals as "admirable". They are so unadmirable that they received the unfettered praise only of Greece, and the opposition of almost every other country. I believe that he has gone back to produce a second version.

Mr. Bowen Wells: In what way can Commonwealth sugar producers be better served than by the settlement—on which I congratulate my right hon. Friend—of 30 million ecu in respect of the 1989 sugar prices?

Mr. Gummer: The developing countries, especially the ACP ones, would be better served if we could reorganise our trading practices to enable us to buy their products and increase trade, rather than take direct action and grant aid.

Ms. Diane Abbott: rose—

Mr. Speaker: In consideration of the hon. Lady's happy marriage during the recess, I shall call her.

Ms. Abbott: How can the Minister justify the Governor of the Bank of England, Mr. Robin Leigh-Pemberton, making £60,000 last year out of set-aside? Does that not show how the system is open to abuse?

Mr. Gummer: I congratulate the hon. Lady on her change of status, but commiserate with her on asking a question about the Governor of the Bank of England on this, of all days. She should add to her comments the cost to the Governor of the Bank of England, or anyone else who sets aside, of looking after that land—[Interruption.] Those hon. Members who laugh have not been near a farm for a long time.

Mr. Maclennan: On a point of order, Mr. Speaker.

Mr. Speaker: Does it concern the reply given to the hon. Gentleman?

Mr. Maclennan: Yes.

Mr. Speaker: I think that a point of order is justified.

Mr. Maclennan: In view of the fact that the Minister invited me to state the policy of the Liberal Democrats—

Mr. Speaker: Order. If the hon. Gentleman is asking for my protection, I must give it. I asked hon. Members to ask questions and not to make statements. The hon. Gentleman asked a question, which was why he was unable to state the Liberal policy.

Whales

The Minister of Agriculture, Fisheries and Food (Mr. John Selwyn Gummer): With permission, I wish to make a statement about whales and the International Whaling Commission.
Recognising the great concern of this House about whales, which I share, I wanted to have the opportunity to report on the first possible occasion on the outcome of the 43rd annual meeting of the International Whaling Commission which took place in Reykjavik last week—27 to 31 May 1991. It was a very successful meeting for the United Kingdom delegation. We set three principal targets, and we have achieved those and more.
First, the moratorium on commercial whaling remains in force. While some stocks have been assessed fully, we co-sponsored a resolution on the proposed revised management procedure. Its further development is now clearly on the basis of low risk and high target levels designed to give maximum safety to whales. We are at this stage only considering the further development of a management system designed to give protection to whales.
Moreover, requests even for modest quotas from Japan for minke whales and from Iceland for fin and minke whales were rejected. There is therefore to be no resumption of commercial whaling this year. Also, Norway's request for the removal of the north-east Atlantic minke's status as a protection stock was also firmly rejected, following presentation of a clear and scientifically based case by the United Kingdom delegation. Minke will therefore still be a species not to be taken.
Further, the United Kingdom delegation co-sponsored resolutions calling on Japan and the USSR to reconsider their proposed research whaling programmes. Those resolutions were successfully passed.
Our second main target was the issue of humaneness of killing methods—methods which are still being used legally by aboriginal whalers. The United Kingdom delegation proposed and secured the establishment of a special workshop, which will thoroughly review all aspects of the methods of killing whales. The last major review was 10 years ago. The issue of efficiency and effectiveness, which is fundamental to humaneness, must be reviewed, and I welcome the support of all members of the IWC in recognising that such a review is necessary. Following a request last year from the United Kingdom, Brazil has withdrawn its objection to banning the use of the cold grenade harpoon. I welcome that.
Thirdly, we also carried forward the work on small cetaceans—dolphins, porpoises and the like. The IWC is divided on whether it has the competence to deal with small cetaceans as well as the great whales. The United Kingdom is quite clear that the IWC does have this competence. In discussions, we pressed this further, and we hope that the issue has been better opened up for more constructive debate next year.
Further, we co-sponsored a successful resolution which will ensure that a comprehensive report on the known status of the many species of whales, dolphins and porpoises prepared by the IWC's sub-committee on small cetaceans to the scientific committee will be passed to the

United Nations Conference on Environment and Development. That gives us another way to try to protect the whale and the small cetaceans.
Those parts of the IWC's scientific report recommending action for the conservation or preservation of vulnerable species will, by this resolution, be brought specifically to the attention of the Governments involved. The House will remember how concerned I was that the Governments of some countries who are outside the IWC chase whales and various small cetaceans. Another resolution which set out these concerns in greater detail has been kept on the table and will provide another platform for further discussion next year.
Tight quota arrangements were also set for aboriginal subsistence whaling by the Alaska Eskimos and the Greenland Inuits, and the quota of grey whales has been reduced by 10.
The many decisions taken at this year's IWC will further such success. The United Kingdom delegation played a leading role in securing these achievements, and I want to pay tribute to the outstanding work of my officials and scientists in this difficult international forum. The conservation of whales has been pursued successfully for this year, and the United Kingdom has much of which to be proud. We must not, however, let up in our efforts, for the preservation of our whales deserves our whole-hearted support.

Dr. David Clark: I am grateful to the Minister for coming at this earliest opportunity to report to the House on the outcome of the IWC conference. Whaling concerns many in this country, and we share the abhorrence of almost everyone at the practice of hunting and killing whales. I must say, though, that the Minister's report today was at some variance with almost every other report by journalists and observers at the conference. The Labour party was certainly disappointed by its outcome.
We were pleased that the plans and proposals of Iceland, Norway and Japan were defeated, but the hunting of minke whales is going to begin next year, and I very much regret that the British Government did not adopt a stronger anti-whaling stance in Reykjavik.
Now that the International Whaling Commission has failed to live up to expectations, is the Minister planning to take any international initiatives? Is he planning to raise the matter at the United Nations, where it is on the table, or in the EC, so as to try to arrest the practice of whale slaughter?
The Minister makes great play of one of his four objectives—that concerning the small cetaceans. He reminds the House that a paper before the sub-committee of the commission pointed out that dolphins, porpoises and other small whales were threatened with extinction in many parts of the world if no action was taken. I know that the Minister understands this point, because he has made many fine speeches on the matter, but I cannot help thinking that his actions in Reykjavik betrayed a slightly and characteristically disingenuous approach to it.
Does the right hon. Gentleman deny that, after initially signing the resolution to protect small cetaceans, he had second thoughts? Does he deny that he instructed the United Kingdom commissioner not to speak up for the resolution? Does he deny that, in the coffee breaks at Reykjavik, the United Kingdom put pressure on other delegations, especially that of the United States, to withdraw the resolution to protect the small cetaceans?


Could it be that he had cold feet because he had given the go-ahead to Cornish fishermen to begin the obnoxious practice of large-scale drift netting, which, as he and the House may know, will involve nets up to five miles long, which will create deserts in many parts of the sea and result in the killing of many porpoises, dolphins and small whales?
I heard the Minister defending this practice on the television. Does he further deny that the United Kingdom delegation approached the United States, which had announced its intention to table a resolution to the IWC to ban the use of drift-net fishing? Do the Government deny that they put pressure on the United States not to go ahead with that resolution?
Will the Minister listen, even at this eleventh hour, not only to Opposition Members but to many Conservative Members who say no to the practice of drift-net fishing? Unless we say no to it, we are entering the trade of killing small cetaceans just as much as countries such as Japan, Iceland, Norway and others.

Mr. Gummer: I have rarely heard anyone undermine so offensively our battle against whaling and against the problems concerning small cetaceans. The hon. Member for South Shields (Dr. Clark) should be reminded of one or two facts, and he might remember his own reputation as a man of decency.
The Government's policy was outlined when I was Minister of State, Ministry of Agriculture, Fisheries and Food, in a document which I produced jointly with Sir Peter Scott, at the meeting of the IWC at Bournemouth some years ago. Our policy was made clear in that document, and we have adhered to it. To my knowledge, the hon. Member for South Shields has never written to me to complain about drift netting off the north-east coast of England. I have never heard him mention that. Why not? I shall tell the House why not.
The reason is that the drift nets used off the north-east coast of England are not 60 miles long. The drift nets of which the United Nations is speaking, which are being used in the south Atlantic, are up to 100 miles long. We are talking of the drift nets that are being used off our coast, which have never, in any scientifically measurable way, caught a dolphin. If they did, or if they caused any damage of that sort, the first Government in the world to take action would be this Government, and the first Minister to take action would be this Minister.
This is an occasion when some indignation at the attack of the hon. Member for South Shields is in order. Of course my delegation did none of the things that the hon. Gentleman suggested. We were the co-sponsors of the motion to which he referred. We did not press it to a vote only because we believed that we would lose the vote, and therefore lose the opportunity next year to press the motion to a successful conclusion. The hon. Gentleman should be ashamed of himself for casting aspersions on my officials and on all those in this place who have worked against the slaughter of whales while endeavouring to conserve small cetaceans. The hon. Gentleman should be ashamed of his response to my statement.
Far from defending the Cornish nets, I made it clear that, in the negotiations within the European Community that will take place in July, we shall be considering motions that, if agreed, would make the nets illegal. The United Kingdom will be supporting those changes and will be seeking to ensure that the carrying of such nets will be

illegal, so as to ensure that we protect waters that the European Community does not control. [Interruption.] When the hon. Gentleman says from a seated position, "Will we be supporting that?", having told us that he heard my television statements, it is clear that he failed to listen to those parts that he did not like. I made it clear in my television statements that we would be supporting it. The fact that he was not clear enough in his understanding is one that he must attribute to Independent Television News, which avoided broadcasting answers to the questions which he raised. It included merely half a sentence. It is not surprising, therefore, that the hon. Gentleman, like some others, was misled about the Government's position.

Mr. Roger Gale: Before the departure of my right hon. Friend's delegation to Iceland, he expressed considerable concern to those of us who went to see him about the method that was being used to kill large whales. He made it clear to us that he intended that the delegation should raise that specific issue and should seek to ensure, before any major whaling operations commenced, that considerable improvements would be made in the manner in which these large mammals are killed. Was any progress made in that direction?

Mr. Gummer: I hope that my hon. Friend will agree that it is important that we now have a working party to discuss the matter. It means that the issue of the humaneness of killing methods occupies a central position in the discussions. That is something that my hon. Friend and I were concerned about. I think that we have achieved what we wanted. We must build on what has been secured and ensure that the work that is done will produce the results that we know it should produce, to show exactly the extent to which some of the methods used are appallingly inhumane.

Mr. Tony Banks: I accept the Minister's sincerity on this issue. We have had meetings about it, so I am aware of his position. Is it not a fact, however, that, under the terms of the IWC's decisions, limited commercial whaling will resume in a couple of years? The fact that Iceland has threatened to leave the IWC is a matter of great concern. Is it possible to renegotiate the terms of reference of the IWC and move it away from whale slaughter, which in the end is what it is all about, into a position of ethical consideration? The majority of people in this country, in the United States and probably throughout the world are entirely opposed to the slaughter of whales. We must try to impress that upon the nations that continue the slaughter.
Is it not possible to make any application for EC membership from Norway and Iceland conditional on their abandoning any form of whaling—scientific, commercial or any other?

Mr. Gummer: I thank the hon. Gentleman for his opening remarks. I appreciate his strong feelings, which. I share to a large extent. The IWC is the only body that has been able to bring about a moratorium. The Government's first aim must be to ensure—as would any Government who believed in protecting whales—that that moratorium continues. There is no agreement that commercial whaling should start either next year or the year after. The hon. Member for South Shields is entirely wrong. I believe that he is disingenuous and mischievous to suggest that.
We believe that we must accept the constitution of the IWC, which requires us to discuss the control of the management of whaling and the enforcement of that management. We are continuing to do that. We have taken some early steps, but there is much more to be done. We stick clearly by the statement that we do not believe that we ought even to discuss the taking of whales unless fundamental conditions are met. In our view, they are not being met. I do not believe that they will be met next year, because a whole raft of information is vitally necessary before anybody, even enthusiasts, can effectively and properly propose the resumption of whaling in the IWC.
The hon. Member for Newham, North-West (Mr. Banks) knows—better, it seems, than his party's Front-Bench spokesman—that it is better to use the existing system, which has achieved a moratorium, than to kick the whole thing over and end up with no protection for the whale. The comments of the hon. Member for South Shields are contradictory. He said that the conference was a failure, but the only country that has threatened to leave the IWC is the country that complains that it has not been allowed to start whaling again.
Some journalists have made different comments, but I want the facts to be given. Which country has threatened to leave the commission? Not the United Kingdom, New Zealand, Australia or America—which are strongly opposed to the slaughter of whales in the conditions that have prevailed until now—but the country that has been pressing most strongly for the resumption of commercial whaling.
I would be sad if those countries left the commission. We must make the system continue to work, because it is the best we have. I will have a meeting with Wildlife Link—which I always have after such discussions—to see how progress can be made not only in the IWC and the United Nations, but on the specific problems caused by the taking of whales by Turkey and Canada.

Mr. Harry Greenway: I congratulate my right hon. Friend on his substantial achievements at the conference. Does he accept that whales have human levels of sensitivity, intelligence and understanding? It is especially murderous to kill them by the methods used in the past. Under no circumstances should we return to the slaughter of whales on such a scale, whatever Iceland, Norway or Japan says.

Mr. Gummer: My right hon. Friend is right in saying that the whale is a very advanced animal and must be protected. I feel strongly that we must do so in the one forum that enables us to stop other people taking whales. If whales were in danger only from this country, which has not whaled since the early 1960s, they would be safe. That international forum is to protect them from the dangers posed by other people.

Mr. Simon Hughes: I thank the Minister for his statement. The result was successful and should be commended. I hope that the right hon. Gentleman will agree that there is no ground for complacency, because in effect all we have done is to agree a further year's moratorium. He will know the strength of feeling in this country that the moratorium should be indefinite.
I understand that, since the Minister began his statement on the Agriculture Council, the Icelanders have announced that they are leaving the IWC. If that is the case, would not a Europewide ban be the only clear way of making the position in respect of European Community negotiations absolutely clear for Iceland and Norway—should Norway be minded to follow the same policy?

Mr. Gummer: There is already a ban on the import of whale products into the Community. I do not believe that the kind of ban to which the hon. Member refers will affect the position—and I have heard only what the hon. Gentleman has heard. However, it would be sad if Iceland decided to leave the IWC. That is a kind of backhanded tribute to the work that we have tried to perform.
It is very serious for a country to state that, contrary to international scientific evidence, contrary to the nonexistence of a management agreement, contrary to our ability to enforce such an agreement and contrary to an understanding of the humaneness of the killing methods, it should decide unilaterally to take up the cause once more. In the end, the Icelandic Government, who are after all democratic and civilised, will reconsider. I will do everything that I can to assist that. The comments of the hon. Member for Southwark and Bermondsey about this matter—which, after all, does not divide the parties—were in stark contradiction to those of the spokesman for the official Opposition.

Mr. Barry Field: I thank my right hon. Friend for his work in relation to small cetaceans. It is more than 30 years since I first set sail from the Solent. In those days, basking sharks and dolphins were regular and enjoyable companions as one sailed westward down the channel. I have not seen a dolphin east of the Bishop's rock for at least 20 years. This is a very urgent and necessary move.
Should we not consider banning the sale of monofilament netting to amateur fishermen? Great clods of such netting come ashore on the beaches of the Isle of Wight whenever we have a south-westerly gale. Those nets must do irreparable harm to the marine wildlife in the western approaches.

Mr. Gummer: I will have to consider the second point separately. It is a different issue from the earlier point raised by my hon. Friend. However, I am also conscious of the fact that our children have the same right to see dolphins as we had when we were young. That is an aspect of conservation about which I am most concerned.

Mr. D. N. Campbell-Savours: Although it may seem out of character, may I pay tribute to the Minister for the very hard line that he took with regard to the Norwegians and in particular the Icelanders? My wife is Icelandic, members of my family in Iceland have been part of the whaling industry, and I sometimes visit that country. Should not the Icelanders realise that they are not enhancing their international reputation by pressing their case in favour of whaling as they do? Should they not realise that they are upsetting the civilised world, which objects to the practice and which pleads with the Icelandic Government and nation to end that industry?
The Icelanders are no longer dependent on it. They do not need it as an industry in future. May a call go from this


House today to the Icelanders requesting them to review their position, not to leave the commission but to play a full and responsible part in the international community?

Mr. Gummer: It is entirely characteristic of the hon. Gentleman to make that kind of comment, and he would not expect me to say otherwise. We can have hard arguments, but there are some things about which we agree, and this is one.
I hope that the Icelanders take the comments of the hon. Member for Workington (Mr. Campbell-Savours) very seriously. Iceland is a northern outpost of European civilisation. European civilisation is primarily about the rule of law. We cannot have a rule of law in the sea unless there are management arrangements, enforcement and rules about humaneness and conservation. Those are all necessary precursors for any civilised discussion about a topic such as whaling. To refuse to wait for those precursors illustrates an attitude towards whales which is unacceptable, and I hope that the Icelanders will review it at once.

Mrs. Margaret Ewing: I thank the Minister for his genuine efforts, which reflect the general view of hon. Members and their constituents about whaling. I want to press him about cetaceans. He will be aware of their importance in my area, as the Moray Firth is one of the two remaining centres for bottle-nosed dolphins. How will the population of bottle-nosed dolphins be assessed" What contacts will be made with the various interested organisations such as the fisheries industry and the local authorities that have a responsibility for pollution aspects in our waterways? I should be grateful if the Minister can give us some information about that and some idea of the time scale involved.

Mr. Gummer: The hon. Lady's remarks were kind. In the past few days, we have initiated a British plan to consider the impact of netting of all kinds on dolphins and other cetaceans. That is part of our contribution. We shall insist that that working party receives papers from a wide range of groups, not only of fishery interests, but groups such as Wildlife Link, which are fundamentally concerned about the conservation of whales. We shall ensure that there is the widest possible consultation and the best possible scientific evidence. In the end, action must be taken on the scientific evidence, and that is what we are trying to ensure. That is one reason why I am particularly sad that the Icelanders feel that they should leave the IWC —if that is true. They are saying that they are not prepared to wait for and act upon scientific evidence.

Mr. Paul Flynn: How does the Minister respond to the accusation of Mr. Sean White of

the Whale and Dolphin Conservation Society, that the buck passing by the British delegation at the meeting will result in several species of dolphin, whale and porpoise becoming extinct? Are not the Government exposed to criticism in spite of the good things that came from the meeting and to the accusation that their policies on small cetaceans—dolphins and porpoises—are little more than pretence and deceit?

Mr. Gummer: In so far as we are all exposed to wholly untruthful claims, yes, I suppose that we are exposed. However, our aim is the protection of small cetaceans and whales. To continue that aim, we and our co-sponsors withdrew the second of the two small cetacean elements, because we wanted to make the best that we could of the one that we managed to get through.
I can tell the hon. Member directly that he does the cause of small cetaceans and whales no good by trying to shoot his own Government, who are universally supported in these issues by all parties, instead of supporting us to deal with those people who are fighting the battle from the other side. I do not know of the particular statement made by a particular individual. However, any environmental agency that seeks to undermine the single-minded view of the British Government does the cause of whales no good. Of course I could get much public support by stating this, standing for that, or banging the table about the other, but that does not save a single small cetacean or whale. It is my business to make it possible to continue the moratorium, to fight the cause of conservation and to do that in the only arena that counts, the only one we have, which is the IWC.

Mr. Andrew F. Bennett: Will the Minister use the same vigour to appeal to the Icelandic Government to reconsider their decision to leave the IWC? Will he make it clear to them that many people in this country will demand that the British Government and the EC look harshly on any application by Iceland to join and that they will be considering ways to introduce a consumer boycott on Icelandic products to bring pressure on Iceland to reconsider? It would be better for Iceland to reconsider now than to be forced to do so as a result of consumer or other action in future.

Mr. Gummer: I promise to do my best to ensure that Iceland does not leave the IWC. We have only just heard what has happened. I am sure that the hon. Gentleman would want to leave it to me to decide, in consultation with many other people, how best to fight that battle. I prefer to win the battle rather than to make public points about the way in which I fight it. In the end, it is not the method of fighting that matters but the success of the battle. I want to keep Iceland within the fold of civilised nations.

Children's Homes (Staffordshire)

The Minister for Health (Mrs. Virginia Bottomley): With permission, I would like to make a statement about the report on residential care for children published during the recess by Staffordshire county council. Copies are available in the Vote Office.
The House will know that, after a thorough inquiry, Allan Levy QC and Mrs. Barbara Kahan have reported on the so-called pindown approach to the residential care of children that had been practised in some Staffordshire residential homes. They say that this was
in all its manifestations intrinsically unethical, unprofessional and unacceptable".
They also conclude that the children who were in pindown
suffered in varying degrees the despair and the potentially damaging effects of isolation, the humiliation of having to wear nightclothes during the day … and of having all their personal possessions removed; and the intense frustration and boredom from the lack of communication, companionship with others and recreation".
Their report also says:
It has been suggested that pindown by any other name probably exists the length and breadth of the country, and is probably more prevalent than anyone would officially care to admit. We received no such admissions in evidence. The practice of pindown has ceased in Staffordshire. If it exists under any other name elsewhere it should be summarily terminated".
The report covers a number of other related issues. It examines in detail allegations that known adult sexual offenders were on occasion permitted contact with children in a home, and that county council officers arranged for a young person for whom they had responsibility to obtain accommodation in a house owned by a convicted sexual offender. Their findings on those points are drafted with scrupulous care. They found inadequate vetting and notification in the cases that they examined, and made recommendations of general importance. The Government will respond with the greatest seriousness to these.
The report also criticises Staffordshire's supervision of arrangements known as "fundwell". Under those, from the mid-1970s until 1987 a council officer set up and developed a network of voluntary organisations and private companies which in some instances contracted their services directly back to the social services department. The district auditor is undertaking a further investigation into financial aspects of those arrangements.
When right hon. and hon. Members read this comprehensive report in full, they will recognise the lucidity, balance, compassion and firmness of purpose of its authors. Looking after the often extremely difficult and disturbed children and adolescents in residential care has become increasingly challenging for those responsible, but Parliament has laid a statutory duty on local authorities to
give first consideration to the need to safeguard and promote the welfare of the child … and so far as practicable, to ascertain the wishes and feelings of the child".
The House, like the Government, must deplore the position revealed in Staffordshire up to 1989.
The report was commissioned by Staffordshire county council in June last year after consultation with the Department of Health. It examines the Staffordshire issues in the wider context of national policies and it makes valuable recommendations for social services departments about the objectives, management and control of

children's homes and the recruitment and training of their staff. Many of these reflect existing good practice around the country.
As the House knows, the Children Act 1989 is to be implemented in full on 14 October this year. By common consent, it is the most important reforming measure in the children's field that we have had in this century. The Government, after consultation, have already issued four substantial volumes of regulations and statutory guidance on its implementation. The volume that covers residential care and secure accommodation was issued for consultation in September last year. It will be published in amended form this month. Many of the recommendations in the Levy report are already addressed in that document. These binding regulations and statutory guidance will require scrutiny of residential care for children throughout the country and its reform where necessary.
The Government are not content to rest on the significant work already in progress. We are today issuing a statutory guidance circular charging all social services authorities to check immediately that their residential care practices are wholly free of the abuses found in Staffordshire, and that they conform to the statutory provisions and regulations governing these matters made by successive Secretaries of State. We are also urgently requiring them to ensure that a statutory complaints procedure is in place and readily understood by all children in residential care.
The House will already be aware that my right hon. Friend the Secretary of State has instructed Sir William Utting, the chief social services inspector, to undertake a special review of residential child care, concentrating particularly on questions of monitoring, control and implementation in the light of this important report. Sir William will consult independent experts outside Government. We will publish his report and promptly address its conclusions.

Ms. Harriet Harman: In dealing with children's homes, we must avoid descending into a spiral of crisis followed by inquiry, followed by crisis and another inquiry. Inquiries are important, but in order to prevent children from again being subjected to the inhuman and cruel regime of pindown or something like it, we must establish a rigorous and continuing system of inspection. At the moment, no such system exists.
The problem is not that inspection fails because people are covering up but that the people with the power and responsibility simply do not know what is going on. Many homes do not see a senior manager, let alone an inspector, from one year to the next. Those who are responsible must know what is going on, and they cannot know unless they go to see for themselves.
Does the Minister agree that there should be service sampling by senior managers, directors of social services and even the Government's own social services inspectorate who would stay from time to time in the homes for which they are responsible? Daytime visits do not give the proper feel and flavour of an institution. It is ironic that the challenging and difficult task of caring for the most disturbed young people falls on the shoulders of the youngest, least trained, least qualified and lowest paid people in social work.
As the Minister said, the Utting inquiry will have to look at staffing, but we know that we will not attract into children's homes workers with maturity and judgment


while the pay and status of residential care work are so pitifully low. In the home where pindown originated, only one member of staff had any social work qualifications. When the Utting report inevitably raises the problem of training, will the Government make extra resources available for training?
Another essential way to protect children is to ensure that they have rights. I welcome the Minister's mention of a complaints system. However, we need not just a complaints procedure but access to independent advice for children so that they can make their rights enforceable. It is unacceptable to treat children badly because they have problems. The test that must be applied is whether the care in a home is good enough for the child of a manager in the relevant social services department. We cannot have double standards by providing care that is good enough for children in homes but unacceptable for anybody else's children.

Mrs. Bottomley: The hon. Lady makes some important points about the need for a coherent approach to the needs of those in residential care. In recent years, their numbers have plummeted from 33,000 to about 11,000. Too many local authorities have singularly failed to recognise the need for good service and proper training. Too many social workers treat their time in residential care as work experience prior to taking up appointments in the community. About 90 per cent. of local authority field social workers are qualified, but the level in residential homes is much lower. That is why we introduced the training support programme, and this year particularly focused it on the needs of residential home workers. This year, some 140,000 local authority staff will be trained under that programme, including approaching half those working in residential care.
Local authorities are the employers of social workers, and they will need to address the status of those in residential homes. I endorse the hon. Lady's point about the importance of social workers in residential homes feeling valued and respected by social services management. The events in Staffordshire, and those in Southwark, in the hon. Lady's own area, demonstrated a complete lack of responsibility among those in social services management to fulfil their obligations to act as good parents to the children entrusted to their care. Above all, it is a question of supervision, control and management—and that is fairly and squarely and unequivocally the responsibility of the social services department.
The point about the complaints procedures is significant. It is appalling that the children's cries went unheard for too long. All children going into care need access to an independent complaints procedure—a telephone number—so that their voice can be heard. The system of statutory visits and of independent visitors failed in Staffordshire. They are meant as safeguards to ensure that children in care are never subjected again to the abuse, neglect and suffering that occurred in Staffordshire and in the constituency of the hon. Member for Peckham (Ms. Harman).

Mr. William Cash: Does my hon. Friend the Minister agree that it is a question not simply of a one-off operation but of a deliberate policy pursued by the Labour county council? Furthermore, it is crystal clear from the report itself that resources was one of the key issues, and that the Labour county council allocated such a low

priority to looking after the children in care that, on examination, it was discovered that the social services department—that includes the Labour politicians who were running the services—had the lowest funds of any in any county in England or Wales. Does not my hon. Friend agree that that is an absolute disgrace, and that it is not just the social services department's top management but the elected politicians and Labour county councillors, who constantly prattle on about resources, who were responsible for a deliberate policy of keeping resources so low that the children were put at such abominable risk?

Mrs. Bottomley: My hon. Friend puts his case powerfully. I refer him to that part of the report in which the hon. Member for Stoke on Trent, Central (Mr. Fisher) makes it clear that
historically, we have been negligent both in expenditure and in policy, not just in social services.
The children concerned were subjected to appalling neglect, and I confirm the points made by my hon. Friend the Member for Stafford (Mr. Cash). The responsibility of the elected members of the council is a matter for the council and for the voters of Staffordshire. However, I endorse the remarks of the new director of social services, and congratulate her on making them. Staffordshire has wisely appointed a director of national eminence, Christine Walby. She has responded instantly to the report, and has put in hand the steps that need to be taken.
Of the report's 39 recommendations, almost all of them are directed at improvements that Staffordshire needs to undertake to protect children more effectively. I hope that all social services departments in the country will act speedily and effectively, to ensure that their own houses are in order.

Mr. Jack Ashley: Does not the Minister agree that the issue is far too important to provide an excuse for making cheap party political points? I deplore the attempt to do so by the hon. Member for Stafford (Mr. Cash).
A fresh start is necessary in Staffordshire, and that requires, first, the resignation of the chairman of its social services committee, Mike Poulter; the architect of pindown, Tony Latham, should be dismissed; and Staffordshire county council should immediately offer compensation to the children who were the victims of that policy, without having to be dragged through the courts. Finally, the Minister should stop pretending to be lily white in this whole business, accept a heavy responsibility, and provide adequate funds for the proper protection of children in care.

Mrs. Bottomley: The right hon. Gentleman made several fair and valid points on matters that should be addressed by Staffordshire county council. However, I cannot accept his remarks about resources. This year, spending on social services departments has risen by 23·5 per cent.—the highest figure in 15 years. This year, there has been a 25 per cent. increase in the amount available through the training support programme, and a 40 per cent. increase in the amount available for social work training generally.
The key point about residential care is that, at a time when numbers have plummeted, local authorities have not properly taken stock of the new needs of the children in question. What will unite the House—it has come as a stark revelation to many in the country—is that children in


residential care are in a particularly vulnerable and needy group. Of course local authorities are doing excellent work in increasing fostering, and in avoiding taking children into care. The figure for children in care used to be 90,000; it is now down to 60,000.
However, children requiring residential care are a difficult, disturbing, and troubled bunch of people. It is entirely unrealistic to expect youngsters in their very first jobs—perhaps with very big hearts but without the necessary skills—to take on such adolescents. Those working in local authority homes need to feel that they have the respect, support, recognition, and supervision of social services management. Too often, they have been left to their own devices, and there has been a singular failure by social services departments to live up to their responsibilities.

Mr. Patrick Cormack: While nothing can ever condone or excuse the kind of cruelty that the report reveals, and although resignations are certainly called for—the social services committee chairman ought properly to resign—we must recognise that some of the children involved were incredibly difficult. Social workers face a difficult task and a terrible challenge. Also, we are talking about a very small number of homes. Staffordshire has taken firm action—albeit belatedly. Its county council commissioned the report from Mr. Levy and published it immediately, and appointed—albeit also belatedly—a new and highly distinguished director of social services. We should put the matter in perspective and move forward on that basis.

Mrs. Bottomley: I appreciate my hon. Friend's remarks. Having got over the shock of the case in question, which arose from the sustained nature of the situation that faced those young children, there is no doubt that Staffordshire is learning the lessons. It has made the important appointment of a new director and has announced a number of measures to put its own house in order. I endorse my hon. Friend's point about the need for maturity and skill on the part of those undertaking such enormously difficult work. Also, it should be remembered that the report dealt with only four homes out of the 19 in Staffordshire; many social services staff in that county discharge their responsibilities effectively, and are equally appalled by the events that have come to light.
The Children Act 1989 provides a volume of binding regulations and guidance which will ensure that all residential children's homes abide by the proper procedures for recording, proper disciplinary measures, management, supervision, review, and the provision of an effective complaints procedure. With the implementation of that Act we will tackle the underlying problems. The report provides, in a sense, an opportunity for every local authority to review and consider its own practices.

Mr. Mark Fisher: Will the Minister join me in congratulating Allan Levy and Barbara Kahan on their brilliant and exhaustive report into this horrific episode, in which children were subject to a wholly unacceptable regime? Does she agree that the decisions that led to the establishment of pindown owed everything to appalling ethical misjudgments by individuals and the lack of monitoring and supervision that she identified, but nothing to a lack of training?
Does the hon. Lady accept the point that my hon. Friend the Member for Peckham (Ms. Harman) made, that only one member of staff at 245 Hartshill road, where this started, had any training and no residential qualifications? Apart from initiating the pindown regime, those members of staff, often perhaps with good intentions, were subjecting children to regressive psychological techniques, taking them back to their moments of initial trauma when perhaps they were first abused, which are enormously dangerous even in the hands of trained psychiatrists and dynamite in the hands of unqualified people. I accept that, nationally, in the past year she has increased the money available for training, but much more is needed, because surely we cannot accept that any staff should be untrained if they are liable to make gross errors of judgment. Will she bear that in mind when Sir William Utting's report concludes, as it must, that more money is needed for training?

Mrs. Bottomley: The hon. Gentleman, who has taken a detailed interest and has been deeply concerned in this throughout and who made a major contribution to the inquiry, is right about the origins of pindown. The report says that it
is likely to have stemmed initially from an ill-digested understanding of behavioural psychology … The regime had no theoretical framework and no safeguards.
It also mentions
the absence of any professional advice in dealing with many children
and that the regime was
in all its manifestations intrinsically unethical, unprofessional and unacceptable.
It was a deplorable episode.
Training is of great importance, particularly as so many social services staff seem to believe that they should gain experience in a children's home and work in the field. I shall not be content until our most skilled workers in the field say that the real job, skills and difficulty are experienced in children's homes. When we reverse that status and balance of priorities, we will have accomplished an important task.
With the establishment of the diploma of social work, which takes over from the CSS and CQSW, we are moving from two-tier social services training to training that is more unified. The establishment of national vocational qualifications and the great development of in-service training are important tools. The new Open University training material on young people, for which we provided funds of £750,000, is effective and useful. Training is of much importance, but so is the regard with which the work is treated and, above all, supervision and management from the department.

Mr. Ivan Lawrence: Will my hon. Friend confirm that no criticism has been made of staff at the admirable Riverside community home at Rocester, in my constituency? Will she also confirm that, although we hear strong speeches about how much Labour cares, Labour-controlled Staffordshire county council steadfastly refused to increase spending to give the priority necessary for child care in Staffordshire, with the result that it had the lowest level of child care in the country? Will she further confirm that that is evidence that social services would be better administered if control were taken from county councils and given to district councils, which, in organisational terms, are much closer to the communities that they serve?

Mrs. Bottomley: I shall not embark on a review of local government structure and functions, but I can confirm that there is no suggestion that the Riverside home is in anything other than the condition that my hon. and learned Friend described.
The report is an indictment of the social services department, not only for the way in which children's home were managed but for the blinkered way in which children's services were regarded. For example, Staffordshire failed to increase remuneration for foster parents. Increasingly, good practice involves trying to establish children, even the more difficult and troublesome children, with foster parents. Foster parents often need not only support but better remuneration. Staffordshire singularly failed to think through that aspect.
In many ways, social service departments are making excellent progress in tackling child abuse and putting more rigorous procedures in place, but they have not considered the new role of residential care. It is almost as though they thought that it would wither on the vine as fostering became more prevalent. That is not true; it has a significant, important and difficult role.

Mrs. Sylvia Heal: No one who has read the report of Sir Allan Levy can be other than concerned about what took place in the four children's homes in Staffordshire, but I am trying to look for something positive from the report. I welcome the initiative of the county council in setting up the inquiry and the recommendations made in the report. I hope to see them well and truly implemented, not only in Staffordshire but nationally.
It is all too easy to use social workers as scapegoats. They constantly deal with the problems that society generally does not wish to know about and certainly does not wish to get involved with. As with cases of child care, they are the Cinderellas of services and are way down the list of additional provision. The Minister implied that social services resources were increased this year, but what about the years before that?
I welcome the report's recommendations and hope to see them implemented throughout the country, because undoubtedly supervision and the complaints procedures are of much importance. What is of concern is that neither middle nor senior management, nor Government inspectors, were able to highlight the difficulties and problems in those four homes. In looking for something positive, let us welcome the recommendations of the report and ensure that they are implemented not only in Staffordshire but throughout the country.

Mrs. Bottomley: I endorse the hon. Lady's point about using the report as an opportunity to ensure that, throughout the country, effective practices are properly introduced. There is the opportunity of the Children Act and the binding regulations that we are introducing this month. They mainly address the recommendations of the Levy report and the establishment of the complaints procedure.
I endorse the points made by the hon. Lady on reducing all incidents of this kind to a form of social work abuse, but the fact is that bad practice must be condemned, and this was the most deplorable example of bad practice and of lack of supervision and management. Staffordshire failed to re-evaluate the ethos of the home and its purpose, to scrutinise again the disciplinary procedures that are

necessary and to review children. These children should have been having regular six-monthly reviews, there should have been proper recording of the disciplinary procedures and, perhaps most outrageous of all, under the secure accommodation guidelines, which we introduced in the early 1980s, this should not have been permitted without the authorisation of the Secretary of State.
Staffordshire failed to take advice, to manage and to follow the regulations. All those aspects are being addressed by Staffordshire and by the detailed regulations that we are introducing. The chief inspector's report will advise my right hon. Friend the Secretary of State whether any further steps can be taken to ensure good practice in children's homes and, above all, monitoring and inspection.

Mr. Gerald Howarth: The report is clearly an indictment of the way in which the Labour party has run social services in Staffordshire, and that action cannot be excused. Nevertheless, I emphasise the point made by my hon. Friend the Member for Staffordshire, South (Mr. Cormack) about the importance of putting this matter in context.
Will my hon. Friend confirm that the children with whom the report deals were taken into care in the first place because they were uncontrollable? Is she aware that constituents have come to me because the family centre in Cannock has been running amok? Children have been out late at night, running around the town, and social workers have had to get them. That is not a satisfactory state of affairs for social workers. Do not we need a disciplined regime of care for such children whereby they can be properly looked after and social workers are given the power to look after them properly and in a disciplined manner so that the rest of society may be protected from them?

Mrs. Bottomley: My hon. Friend is right. He has spoken to me about his worries about the situation in Staffordshire. Increasingly, these young people are older than children in residential homes were in the past, and they are pretty uncontrolled; they are difficult to control. The children's homes need a programme of care, control and activity. The deplorable position in Staffordshire meant that the young people were oppressively controlled and scarcely cared for, unlike the young people in Southwark, who were scarcely cared for and certainly not controlled. A balance of care, control and activity must underlie the principles of residential care.

Mrs. Llin Golding: I take the report seriously and am deeply distressed that my county council, Staffordshire, should be the council so rightly blamed in that report. The Birches home is in my constituency and it causes me great sorrow.
I should like to put it on record, however, that it is not true that nothing was done by local politicians to bring the county council to book. My hon. Friend the Member for Stoke-on-Trent, Central (Mr. Fisher) and I visited Staffordshire county council as soon as we found out that something was going on in the homes, and we had a meeting at the highest level in the same week in which the solicitor, Kevin Williams, announced what was happening with pindown. I have had correspondence with Staffordshire county council—which I have in my hand —on what was to happen, and the council has been open and forthcoming. We did not go public, because we felt


that enough damage had already been done to too many children in Staffordshire, and that going to the press would be detrimental to them.
Will the Minister consider doing something for which we asked during the passage of the Children Bill—extending the training of social workers by a year? There should be an additional year's training for all social workers who have to deal with children, who are the most vulnerable members of society.
What does the hon. Lady intend to do about separating abused children from the criminal child element in children's homes? I wrote to her asking for additional money for Staffordshire county council to enable it to do that, but the reply was no. What will happen as a result of the report?

Mrs. Bottomley: I endorse the hon. Lady's point about the role played by Kevin Williams in drawing attention to this matter. It was as though there was a conspiracy of silence for many years among all involved before he took decisive and determined action to bring it to people's attention.
There has been a 40 per cent. increase over the past year in the amount of money that we have spent to extend the number of social workers brought into qualification and to promote post-qualification training and in-service training. I believe that there is a more effective approach—there should be in-service training for all social workers and post-qualification training for those with a special interest in a particular speciality. In staffing children's homes, special attention must be given to the ability, skill and experience of those undertaking the work, which is precisely what will be made clear in the guidance.
Staffordshire social services, as with other local authority social services, has had an increase of about 23 per cent. this year in the amount available to spend on social services. It is for Staffordshire to use its judgment as a local authority to give priority where it is due. Giving it to this needy group of children is certainly the priority that it would be advised to follow.

Several Hon. Members: rose—

Mr. Speaker: Order. I think that I have called all the Staffordshire Members who are directly concerned with this matter. I shall allow questions on this important subject to continue for a further five minutes, but then we must move on to the Local Government Finance and Valuation Bill.

Mr. John Greenway: Does my hon. Friend agree that people want to know that regimes such as pindown will not recur? Will the welcome announcement about a statutory guidance circular lead to the Government publishing details wherever there are problems? Will the Government spare no effort in rooting out places where neglect occurs, whether those looking after young children or those looking after the elderly? Will my hon. Friend comment on rumours about neglect in some homes for the elderly in south London?

Mr. Speaker: Order. I think that the last question is wide of the statement.

Mrs. Bottomley: My hon. Friend asks about the steps being taken to avoid such problems ever occurring again.

The statutory guidance spells out local authorities' duties to inspect their homes. This is the key element of local social service provision: local authorities have a duty, and they are entrusted, to act as good parents to the child. The additional safeguard of having a complaints procedure available to every child in care is the belt and braces of the policy. None of us must be anything other than vigilant to ensure that children do not suffer and are not neglected, particularly those children who are taken into care because of the abuse or distress that they have already suffered.

Mr. David Bellotti: We all want to do our best for children in care. Will the Minister join me in expressing thanks to one Staffordshire councillor, Councillor Christina Jebb, who for several years has called for and fought hard for an inquiry into pindown? In the knowledge that Councillor Michael Poulter kept information from other Staffordshire county councillors on the social services committee for more than six months with regard to the High Court action—an admission that he has already made—and in the light of the fact that, as recently as April 1990, the leader of the council publicly regretted the forced closure of pindown, will the Minister review the inquiry which she announced and instigate a full public inquiry? The people of that area and of other areas do not wish to know that there is any possibility of a cover-up in Staffordshire. We want to get to the bottom of what has happened there so that we can learn and can improve facilities across the whole country for young people in our care. We need a full independent inquiry.

Mrs. Bottomley: I note that the tribute in the report is paid above all to the hon. Member for Stoke-on-Trent, Central (Mr. Fisher) for his powerful and brave remarks to the inquiry. The report is an authoritative and clear document. Only the Liberal Democrats think that the answer to every problem is to have yet another public inquiry. We know the principles; we have the legislation; we have the regulations and the statutory controls. The purpose of the chief inspector's report is urgently to ensure that safeguards are in place so that children's homes are properly monitored and inspected.

Mr. Peter Thurnham: I deplore what happened in Staffordshire. Will my hon. Friend assure my constituents that unruly youths in care will be kept properly secure? In Bolton, a 14-year-old, supposedly in the council's care, has been allowed to commit more than 40 offences, not to mention fathering a child himself.

Mrs. Bottomley: My hon. Friend identifies the other equally vexatious matter of these difficult children tearing around the streets making their neighbours' lives a misery. It is fair to see these difficulties in that context. There are regulations covering secure accommodation, and young people should not be locked up for more than 72 hours without a court order. The real indictment is that Staffordshire failed to realise that it had effectively established secure accommodation. Once the units are established as secure accommodation, they must be inspected regularly by the social services inspectorate and special safeguards must be put in place. Nobody would disagree with my hon. Friend that such provision is definitely needed—it cannot be done by niceness alone.

Mrs. Rosie Barnes: As the Minister will be aware, for many months I have been calling for a full national, independent inquiry into the circumstances of


children in residential care. I am concerned that, within social work circles, attitudes and behavioural patterns which are abhorrent to the rest of us have been established, are beginning to be accepted and are perhaps seen as inevitable, justifiably in some instances because of the very difficult children involved.
Will the Minister reconsider the decision to place the review in the hands of the social services inspectorate? Although the individuals involved might be very worthy —I do not doubt that for one moment—the attitudes prevalent in social work circles must be challenged and those people might not be sufficiently detached from what needs to be done on a national basis.

Mrs. Bottomley: It would be difficult to find any knowledgeable individual or source who did not have the highest regard for the professional integrity of Sir William Utting, the Secretary of State's chief professional adviser. I have no doubt that there is no one better placed to undertake the review, as he will before he retires. He steered through the Children Act 1989, he has advised successive Secretaries of State and has met with the absolute, unequivocal confidence of all Ministers with whom he has worked.
It is important to appreciate that the role of the social services inspectorate is not to inspect each and every social services provision—that is the clear, unequivocal responsibility of local authorities. If local authorities say that they are not up to the task and are unable to fulfil their social services obligations, that is another matter. That would be a most regrettable step, but they must be held to that inspection role. One aspect that the chief inspector may carefully consider is the role of the arm's-length inspection unit—to ensure that there is an arm's-length distance between the management of the homes and those involved in inspecting them. To decide whether there is anything more that the inspectorate can do nationally to strengthen that function my be one of the most productive aspects of his report.

STATUTORY INSTRUMENTS, &c.

Ordered,
That the Erskine Bridge Tolls Extension Order 1991 be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the Companies (Fees) Regulations 1991 (S.I., 1991, No. 1206) be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the draft Welfare of Pigs Regulations 1991 be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. Chapman.]

Orders of the Day — Local Government Finance and Valuation Bill

Order for Second Reading read.

Mr. Speaker: In view of the late start, I appeal to Front and Back-Bench Members to make brief contributions.

The Secretary of State for the Environment (Mr. Michael Heseltine): I beg to move, That the Bill be now read a Second time.
I ask for the indulgence of the House to excuse me from my place during the wind-up debate for reasons that I have conveyed to the official Opposition spokesman.
This is a short Bill, but it has two important intentions. First, it is designed to strengthen our capping powers for 1992–93 so that we can ensure that all charge payers have the protection that they rightly expect against excessive local authority budgeting in the run-up to the new council tax. Secondly, the Bill provides the powers needed for the banding of domestic properties, which is the first essential step towards our objective of introducing the council tax from 1 April 1993.
The House will know that the Government already have powers to cap the expenditure of individual authorities where the budget of an authority exceeds £15 million. The original proposals assumed that a de minimis exemption of that sort would be appropriate.
There are two issues involved, and I intend to confront them at once. The first concerns the desirability of capping at all. The second raises the need to extend the provisions to all authorities. We are addressing only the second of these issues this afternoon, but it is worth rehearsing the arguments for the wider restraint as well as the narrower and new proposals.
I make no secret of my view that the most desirable arrangements would be those that relied on unfettered local accountability—I have said so many times—but such a system must be compatible with the responsibility of the Government for the overall management of the economy. Indeed, it must also be compatible with the Government's duty to protect citizens from the consequences of high spending authorities.

Mr. Robert Adley: I am sorry to intervene so early in my right hon. Friend's speech, but I am sure that he will understand why. Since 1972, I have had the gravest reservations about a Conservative Government introducing legislation that begins with the words "local government". Is he aware that East Dorset district council in my constituency, with which I discussed the Bill on Friday afternoon, is a small, well run local authority which does not qualify for any of the criticisms which have rightly been made against other authorities? The council's problem is the standard spending assessment. Will my right hon. Friend assure me that, before we get to the figures for next year, he will at least allow me the opportunity to discuss with him the SSA as it affects East Dorset?

Mr. Heseltine: I am grateful to my hon. Friend. I appreciate his strictures about local government finance


legislation. I hope that there is nothing personal in his observation, because I think that I have been personally associated with every one of the measures about which he is so concerned. I know how ardently he represents his constituents' interests, and I would always be prepared to talk to him about any matters that he wished to raise. The issue of SSAs is always a matter of controversy, because almost every authority feels that it does not get the most advantageous arrangements to suit it. However, whenever changes are made, someone wins and someone loses. It is our responsibility to consider these issues every year in the light of whatever information is available to us. My hon. Friend has my assurance that I shall talk to him about his concerns.
As I said, the ideal arrangement would be to leave accountability in the hands of local authorities, but that would have to be under a regime where the system was compatible with the Government's responsibility for the overall management of the economy. I learned those lessons when I listened to the right hon. Member for Bethnal Green and Stepney (Mr. Shore)—my predecessor in the 1970s—to take firm action to limit the expenditure of local authorities on current account for the first time since the war. There is no dispute in practice between the Government and the Opposition except when the Labour party finds itself in opposition.

Mr. David Blunkett: The Secretary of State will recall that the actions taken in the late 1970s related to the ceiling placed on the amount of central Government revenue at the disposal of local government, not to the raising and spending of local revenue within a local community. I should be grateful if he would tell me which macro-economic law or which economist—Friedmanite or otherwise—has ever suggested that the raising of revenue locally and the expenditure incurred locally has any macro-economic impact on central Government overall fiscal policy.

Mr. Heseltine: It is interesting that the hon. Gentleman should raise such profound questions, as they did not seem to preoccupy his party when it was in office. Although, as he said, it certainly took powers to restrain the overall level of current account spending, where it had more specific powers on the capital programmes for housing and for water, it took direct decisions to reduce those capital programmes year after year.
The conditions to which both parties are attracted when in power can be met only if authorities budget within the broad guidelines set by national Government. The facts, unfortunately, speak for themselves. The Government had the highest hopes that increased accountability would lead to sensible and prudent budgeting by all local authorities. It is a disappointment that, in the event, that has not proved to be the case. It is a disappointment that some authorities have not chosen to budget responsibly. We are prepared to face the facts, however unpalatable. It gives me no pleasure to say that on the evidence, I am satisfied that strong capping powers are an essential aspect of any local government finance system.
What is the evidence? In England in 1990–91, authorities used the change to the new system as a smokescreen to hide vastly increased expenditure. In that year, spending rose by 13·5 per cent. and over the two-year

period to April 1991, spending rose by more than one quarter. Such massive and unjustifiable increases could not be allowed to continue.

Mr. Christopher Gill: Will my right hon. Friend accept that, as long as we perpetuate the system by which central Government effectively subsidise local government to such an extent, the means by which local government will become prudent are eroded? One will have true economy and thrift in local government only when local councillors have to raise locally £1 for every 100p they spend. The further that one gets away from that concept, the more remote is the prospect of true economy and thrift in local authorities.

Mr. Heseltine: My hon. Friend makes an interesting suggestion. However, if one were to examine the resources of some of the more hard-pressed authorities and their undeniable needs, it would be difficult to see how to square 100 per cent. of expenditure with 100 per cent. of local revenue. The Government take the view that there is a balance to be struck. We have changed the incidence of the balance very much for the better through my right hon. Friend the Chancellor's Budget, but it is very much the Government's view that it is appropriate that local authorities should have some revenue-raising capacity of their own.
We saw substantial increases. Expenditure rose by more than one quarter in the two-year period to April 1991. For 1991–92, we acted and used our capping powers to achieve as much as possible by deterrence and as little as possible by capping. We told the authorities the capping criteria that we intended to use before they made their budget judgments and the results speak for themselves. In contrast to the previous year, English local authorities' spending is within 0·5 per cent. above the amount that we provided in our settlement. Of 39 county councils, 37 budgeted below the intended criteria. Of the 36 metropolitan districts, 35 budgeted below the intended criteria. Of the 33 London boroughs, 31 budgeted below the intended criteria. It is for those reasons that we have made it clear that we do not intend to be caught again. We intend under the new council tax to have strong and effective capping powers appropriate to the new system.
As the whole House knows, in the circumstances that I have described, our capping powers were not comprehensive. We could not cap authorities budgeting below £15 million however excessively such authorities might be budgeting. We were unable, for example, to protect the charge payers of Derwentside, a council whose overspending added £95 to the local community charge. We could not protect the charge payers of Harlow, where the council's excessive budgeting added £83 to the charge.

Ms. Hilary Armstrong: Does the Secretary of State remember the words of other Ministers about the good work of Derwentside in ensuring that it contributed to the regeneration of the area following the closure of the steelworks at Consett 10 years ago? Without the substantial contribution of the local authority, no money from Europe, from central Government or from the private sector would have been available.

Mr. Heseltine: The hon. Lady misses the point. Many authorities with SSAs broadly in line with that of Derwentside are perfectly able to come either below or


very close to the level of the SSA. All local authorities have individual cases to plead. The fact is that varying circumstances can be used to generalise in each case to show that it is perfectly possible for local authorities prudently to deliver an adequate service at the SSA levels set by the Government.

Sir Geoffrey Johnson Smith: My right hon. Friend referred to small spending authorities. Wealden district council is a small and prudent spending authority. Does my right hon. Friend agree that there is some concern among such authorities about the effect of the Government's capping proposals? A small spending authority, such as Wealden, can find that, for reasons completely beyond its control—one-off spending, for example, because of Government legislation which imposes considerable public spending increases and may only be for a year or two—it is included, because of the percentage increase, in the capping arrangements. That is unfair for councils that have a prudent record and which are capped because of a one-off item of expenditure.

Mr. Heseltine: I fully understand the point that my hon. Friend makes so eloquently. However, he will know that the capping mechanism is immensely sensitive. First, authorities know in advance the standards that the Government have laid down. Secondly, they can make representations and thirdly, they have an appeal to the Secretary of State. Exceptional circumstances are very much considered in any Government action— —

Mr. D. N. Campbell-Savours: Including Wandsworth?

Mr. Heseltine: Wandsworth does not need exceptional circumstances consideration. It is a thoroughly well-run authority.
As I have made clear, the existence of the £15 million de minimis rule left a number of authorities able to add significantly to the community charge level in their area without the Government being able to protect charge payers. Indeed, almost 40 authorities in England with budgets below £15 million this year overspent their SSA by £26 per adult and more, which translates directly into an extra £26 or more on the charge. Yet we could do nothing under current statute. We could not step in to protect local people from the consequences of that excessive spending.
There were clear examples of authorities deliberately setting the budget at a point marginally below £15 million to keep out of the capping regime. Thurrock and Maidstone are examples. It may have been a coincidence —although I find that difficult to believe—that put £50 on the bills of the people of Thurrock and £32 on the bills of local people in Maidstone.
As my hon. Friends the Members for Christchurch (Mr. Adley) and for Wealden (Sir G. Johnson Smith) have pointed out, many small authorities are economical and prudent, and I do not have the slightest doubt that they will remain so. They have nothing to fear from the Bill. Authorities that keep to prudent levels of expenditure will enjoy the full benefit of adequate service delivery with reasonable charges. However, the House will realise that the two new and related arguments that we now have give anurgency to the actions that we propose.

Mr. Tam Dalyell: Although I recognise that this matter is the responsibility not of the Secretary of State, but of the Scottish Office, may I ask for an

explanation from the hon. Member for Eastwood (Mr. Stewart), the Parliamentary Under-Secretary of State for Scotland, when he winds up the debate, about why the prudent authority in Lothian, which spends markedly less than Dumfries and Galloway, the authority of the Secretary of State for Scotland—we should consider every criterion of fairness and rectitude—should be punished in an uncalled for, vindictive and devastating way? May we have an explanation about Lothian?

Mr. Heseltine: ?: I can produce instant satisfaction for the hon. Gentleman. He will be given the most eloquent and intellectually coherent explanation when my hon. Friend the Under-Secretary of State for Scotland winds up the debate this evening.
The House will realise that two new and related arguments give urgency to the action that we are discussing this afternoon. My right hon. Friend the Chancellor of the Exchequer has provided substantial help for charge payers this year. As a result, the contribution of local taxation to the funding of local government spending in Great Britain has fallen from 25 per cent. in 1990–91 to 14 per cent. for 1991–92.
My right hon. Friend the Chancellor has also set out our determination to maintain the new and lower proportion of locally raised contribution. It is apparent that the new arrangements lead to a particularly high gearing for overspending. Every 1 per cent. of overspending is equivalent on average to 7 per cent. on charges. Hon. Members could say that that will be its own deterrent. But my right hon. Friend's generosity undermines that argument. He has enabled local authorities to reduce their headline community charge by £140. It would be folly indeed to allow authorities to erode this benefit for so many people by overspending.
This year our legislation ensured that the extra money went straight to the charge payers themselves because we waited until local authorities had set their budgets before we announced the new scheme. But that option is not open for us for the coming year. We must therefore anticipate the risk that the Chancellor's generosity might be frittered away. To prevent that is the purpose of the first part of this legislation. It is for those reasons that we seek to strengthen our capping powers next year by bringing authorities which budget below £15 million into the scope of capping, and by bringing the powers to cap Scottish authorities into line with the more extensive powers which are available in England and Wales.

Mrs. Maria Fyfe: Would the Secretary of State care to tell the House which Scottish local authorities he considers to be extravagant and to spend too much of poll tax payers' money?

Mr. Heseltine: My right hon. Friend the Secretary of State for Scotland has been eloquent on that subject on many occasions. I have not the slightest doubt that I do not need to add to the graphic descriptions that he has provided. However, if the hon. Lady persists in her questioning, my hon. Friend the Under-Secretary of State will give a most coherent answer and specify a long list of such authorities when he replies to the debate.
I turn now to the provisions of the Bill. Clause 1 will remove the £15 million—

Mr. Dick Douglas: On a point of order, Mr. Deputy Speaker. I apologise for interrupting,


but I am extremely intrigued about how the Secretary of State for the Environment will discuss in detail a Bill which has seven clauses, only two of which apply specifically to England and Wales, three of which apply specifically to Scotland and two of which are shared. How can he entertain the House with a graphic description of the detail of the Bill when he persists in telling us that all questions about Scotland will be deferred until the reply to the debate?

Mr. Deputy Speaker (Mr. Harold Walker): That is not a point of order.

Mr. Heseltine: If the hon. Gentleman will contain himself, I shall answer his question specifically. The first answer is on clause 2 which deals with Scotland and will bring the Scottish capping powers into line with those in England and Wales. Experience has shown that the existing powers have proved inadequate given local authorities' lack of regard for the interests of their charge payers. Yet under the present legislation, my right hon. Friend the Secretary of State for Scotland has taken action against only one authority. That authority has been referred to already. It is Lothian regional council. My right hon. Friend took action against only one authority notwithstanding that Scottish authorities chose to increase their charges by an average of 30 per cent. That outrageous increase was despite a very fair grant settlement of 10·4 per cent. which should have enabled local authorities to keep charges at reasonable levels.
Clause 2 will amend the Scottish capping powers, thus enabling my right hon. Friend to take capping action where he is satisfied that an authority's planned expenditure is excessive or that there is an excessive increase in such planned expenditure compared with the previous year. With these amendments for the first time my right hon. Friend will be able to take action against excessive increases in budgets. My right hon. Friend will also for the first time be able to set out the principles or criteria by reference to which he will take his capping decisions.

Mr. Donald Dewar: The Secretary of State says that, for the first time, the Secretary of State for Scotland will be able to take action against excessive increases in budgets. Will he explain why that was not possible under section 5 of the Local Government (Scotland) Act 1966? The Secretary of State has smoothly referred to the increase in the community charge, but will he tell us the increase in local authority expenditure in the same period?

Mr. Heseltine: I do not remember any 1966 Act. I thought that the position was clear and that the Labour party had not introduced specific capping measures. Any measures that we introduced must have come in the 1980s and I was not asked questions about them.

Mr. Douglas: Will the Secretary of State give way?

Mr. Heseltine: No. I have given way to the hon. Gentleman before.

Mr. Dewar: I am sure that the Secretary of State will remember that the foundation legislation in which powers to take action against excessive and unreasonable expenditure are taken is section 5 of the 1966 Act. Of

course, that Act has been amended many times. I ask the Secretary of State to explain the exact change in terms of the excessive expenditure of a threatened authority. Will he also answer the other question? When he says that excessive increases in expenditure are important, will he give the excessive increase last year in the expenditure of Scottish local authorities?

Mr. Heseltine: I have given the figures for the increased expenditure of local authorities and the effect on their charges. In our view, it was excessive and unacceptable. For that reason, my right hon. Friend the Secretary of State for Scotland has decided to bring the powers in Scotland into line with the powers in England.
The hon. Gentleman asked me about the position that arises out of the 1966 legislation. However, the capping provisions were introduced under this Government some 20 years later. So it is not realistic to think that the Labour Government in 1966 ever sought to constrain Scottish local authorities under the type of legislative controls that we are discussing. If they did—[Interruption.] I do not know what the fuss is about, or why the Labour party constantly carps about what we are doing. I hope that the Labour party will vote with my hon. Friends and me in the Lobby because apparently we have reached unanimity about the need to cap Scottish local authorities.
This Bill therefore, if approved, will strengthen our capping powers for 1992–93. It is our intention, as this year, to announce in advance the capping criteria that we intend to adopt. We are seeking rapid enactment of this measure so that our capping powers are clear before we come to make that announcement in the autumn and before authorities come to consider their budgets. All authorities will know before they take their budget decisions what are our intentions for capping. Neither my right hon. Friends nor I are seeking next year to cap large numbers of authorities. It is our hope that authorities will choose to budget sensibly. But let there be no doubt that we shall not hesitate to cap any authority which budgets excessively or budgets for an excessive increase and thus burdens its charge payers. With our new powers, if this Bill is approved, charge payers everywhere will have the protection which they have the right to expect.
Clauses 3 to 6 of the Bill deal with valuation and are the first step towards our objective of introducing a council tax from 1 April 1993. We published our consultation paper on the new council tax to replace the community charge on 23 April. I told the House that there would be no need for precise valuations of every house or flat for the council tax.

Dr. Norman A. Godman: Will the Secretary of State give way?

Mr. Heseltine: If the hon. Gentleman will forgive me, we are short of time and I must get on with this section of my speech.
Instead, our plans for the council tax involved allocating properties to one of seven broad bands. The Bill provides the necessary powers. I remind the House that under the scheme that we have proposed, people in the lowest band of property will pay two thirds of those in a property in the middle band in the area. People in a highest band property will pay two thirds more than those in the middle band in the area. That means that, in each case, a household in a highest band property will pay two and a half times as much as one in the lowest band.
We are committed to avoiding the very high bills which discredited the rates.

Dr. Godman: Will the Secretary of State give way?

Mr. Heseltine: No.
This year, on the assumptions that we set out, a council in England which spent at the standard level— —

Dr. Godman: With his usual courtesy, will the Secretary of State give way?

Mr. Deputy Speaker: Order.

Mr. Heseltine: A council which spent at the standard level would have charged a household of two or more people in a top band property no more than £668 and such a household in a lowest band home no more than £267.

Dr. Godman: I am grateful to the Secretary of State. Clause 3 deals with the assessment by local assessors of the value of domestic properties in Scotland. Does the Secretary of State intend to say anything about a right of appeal? Will such a right be part of the extant Scottish legal system or will an independent appeals tribunal be created in Scotland?

Mr. Heseltine: The hon. Gentleman raises an important point. There will be a right of appeal. As the hon. Gentleman knows, assessors in Scotland come within the local government system, which is different from the arrangements for England. The Bill contains special arrangements to deal with that contingency and, particularly, to make grants available to local authorities in Scotland to meet the additional expenditure involved.
There are specific provisions for Scotland, and certainly there will be a right of appeal in Scotland as there will be in England and Wales.

Mr. Dewar: I am sure that that will be a matter of discussion later in the debate, but the right hon. Gentleman will know that there has been much curiosity in Scotland about clause 5(3) which states:
A local assessor shall comply with such directions as may be given by the Commissioners of Inland Revenue.
In Scotland, the assessor has always been an independent authority, and I am anxious to know what those directions might be.

Mr. Heseltine: That is an important point; there should be parity of valuation in Scotland, England and Wales. It is our intention for the Inland Revenue to mastermind the valuation exercise, using assessors in Scotland. It is important that it should be possible for the Inland Revenue to give appropriate directives so that the Scottish valuations are in line with those in England and Wales. That is the purpose of the exercise.

Mr. Tony Marlow: My right hon. Friend will remember that when we debated the community charge legislation a lot of his hon. Friends supported it on the basis that we thought it would be introduced at a relatively low level. In the event, it came in 50 or 60 per cent. higher than we anticipated.
My right hon. Friend has just said that, on his calculations, when the council tax is introduced—bearing in mind the fact that people spend according to needs and are effective and efficient in their use of resources—the tax

levels reached will be acceptable to his hon. Friends. Will my right hon. Friend say how confident he is that the council tax will be restricted to those levels?

Mr. Heseltine: My hon. Friend will want to join me with enthusiasm in the Lobby tonight. It is precisely because we do not want to get caught again that we now have comprehensive capping arrangements to prevent the Labour party from frittering away the benefits that the Chancellor of the Exchequer has made available in his recent Budget.
Taken together with the personal discount, this year households with one adult would have paid no more than £501 in the top band and no more than £200 in the lowest band. People on low incomes will receive rebates in addition to any discounts to which they are entitled and there will be no minimum contribution to the council tax. It will be seen, and it has already been seen by public opinion, as a fair tax and much to be welcomed.

Mr. Barry Field: Does my right hon. Friend not think that there is a logical case for introducing the council tax at the same time as local government reform or for bringing local government reform forward to coincide with the introduction of the council tax in those areas which have already had the benefit of a Boundaries Commission recommendation? Will he confirm that the discretion on the 50 per cent. reduction rebate for second homes will remain with local authorities and not be taken by central Government? I was robust in ensuring that all my second-home owners paid a full charge and were not subsidised by the local community. Will he also confirm that 100 per cent. rebates will be available when necessary because that has been a particular problem with the community charge?

Mr. Heseltine: My hon. Friend has asked a number of questions. We have made it clear that there will be a comprehensive rebate system and that there will not be a minimum assumption as under the community charge arrangements. Our arrangements for empty properties have also been made clear. They will be subject to two personal discounts, and that will be a standard arrangement across the country and without discretion.
My hon. Friend also asked about the possibility of phasing in the new council tax. I do not think that that would be practical or, frankly, desirable. I believe that people want to see the council tax in place at the earliest possible opportunity, which we believe to be 1993. The phasing of the structural changes to local government will start in 1994 and will follow on from that. It would not be appropriate to wait for that to coincide with financial changes and there would be a great deal of pressure on us to introduce the community charge replacement scheme in 1993 as we intend.

Mr. Adley: I am sorry to interrupt my right hon. Friend again. It sounds as though there will be a perpetual motion of changes to local government finance and local government boundaries. That causes some concern.
The Association of District Councils seems to be encouraging chief executives to tell their Members of Parliament that, whatever the Government's intentions, there will be a need to establish a register for the council tax. Will my right hon. Friend disabuse us of that proposition? Will he say a little more about how rebates


can be claimed? Will he do his best to ensure that that information is disseminated as widely as possible? How will he go about that?

Mr. Heseltine: My hon. Friend will understand that they are matters for the principal legislation, which will be introduced in the autumn. When I made my first announcement to the House, I made it clear that we did not see the need for a register to make the system workable. One of the attractions of a broad banding system is to avoid the need for a register. I believe that that was widely welcomed when I made that announcement.
Details on the specific nature of the rebate system will be announced in good time for people to understand them and to make comments on them as we move towards legislation. They are not covered by the narrow and specific Bill that we are debating today.
The provisions in the Bill will enable progress to be made as soon as possible towards the new system we decide upon after considering the suggestions put to us during consultation. The provisions are enabling provisions covering two crucial aspects of preparation for a new property-based council tax.
First, they provide the power for the allocation of domestic properties to bands to be carried out—that is a power to prescribe principles for the exercise in regulations. Secondly, they ensure access to the information needed to ensure that the allocation is soundly based. There are tough safeguards on the use that can be made of that information.
We have made no secret of our intention that private sector valuers should undertake much of the work involved in the valuation. This will be effective and economical. It will ensure speedy action and, most of all, it will make use of the great expertise available in the profession which it must be right for us to tap. I can, however, assure the House that the overall process of valuation will be supervised by the commissioners of Inland Revenue to ensure the uniformity of treatment that is essential if the valuation is to be fair and sound.
I have already described how those provisions interrelate with those for Scotland where the assessors will be responsible for carrying out valuation. The expertise which they have accumulated in undertaking large-scale valuation exercises makes them well placed to do the job promptly and thoroughly. It is important that the valuation task is tackled consistently throughout Great Britain, and the commissioners of Inland Revenue are given a power—which hon. Members have mentioned—of direction to ensure that consistency in Scotland. The assessors already work with the Inland Revenue valuation office to achieve consistent treatment of non-domestic valuations, and this collaboration will now be extended to the domestic sector.

Mr. Douglas: rose—

Mr. Heseltine: I have already given way three times to the hon. Gentleman.
As the assessors are local government employees the clause empowers the Secretary of State for Scotland to pay local authorities' grant towards the assessors' costs. In other respects, the provisions for Scotland follow the parallel English provisions.
Clause 4, for England and Wales, and clause 6, for Scotland, enable those carrying out the valuation to obtain the information necessary to do so. Information is a sensitive subject, and I would particularly draw the attention of the House to the protection we have built into the Bill. In particular, clause 3(6) provides that disclosure of information obtained for the purpose of valuation could lead to imprisonment or a heavy fine, or both. I cannot stress too highly the importance that we attach to securing that the information which is obtained as part of this exercise is used properly and only for the purpose for which it has been provided.
We have set out our firm intention of introducing a council tax on 1 April 1993 and have been advised that to do so requires urgent action if the preparations are to be made properly. We have listened and have brought before the House practical measures which will result in a fair and soundly based system of local government finance operative from 1 April 1993.
The Bill prepares the way for the introduction of the council tax. By strengthening our capping powers, we can be confident that expenditure will be restrained and that charges will be at acceptable levels. We are now bringing forward serious practical measures designed to secure our firm objective of introducing a fair and practical council tax from April 1993.

Mr. Bryan Gould: The only remarkable feature of the otherwise unremarkable speech that we have just heard is the fact that it was the Secretary of State made it. After all, he has shown a marked reluctance to come to the Dispatch Box to spell out his views on capping. Just two days before the Whitsun recess, he ducked out of the capping order debate and delegated it to his Minister of State. He originally intended that this measure, too, should be handled by his junior Ministers. At least this time we have shamed the right hon. Gentleman into coming to the Dispatch Box to explain the measure, but his right hon. Friend the Secretary of State for Scotland does not appear to be present.
The Secretary of State for the Environment is not usually a shrinking violet—he does not normally shun the limelight. That leaves us puzzled about why he has shown uncharacteristic reluctance and reticence, an impression that was reinforced by his speech today, in which he scarcely concealed his distaste for some of the proposals that he had to put forward. We are also puzzled about why he has been prepared to show that he has little enthusiasm for the measure.
The most likely explanation is that the Bill represents a series of defeats. It is a compendium of the defeats that the Secretary of State has suffered at the hands of the Cabinet and the Prime Minister. As a consequence, he regards the Bill as an embarrassing record of his failures and therefore feels little commitment to it. Indeed, he feels antipathy for some of the provisions.

Mr. Patrick Nicholls: Will the hon. Gentleman give way?

Mr. Gould: No, I wish to complete this point.
The fact that the Secretary of State does not mind who knows his position speaks volumes for his relationship with the Prime Minister. Even his speech this evening can only fuel speculation that, in common with the rest of the


country, the right hon. Gentleman has decided that the Prime Minister's days are numbered and that he does not mind whether his conclusion becomes public knowledge.

Mr. Nicholls: The hon. Gentleman spoke of embarrassment. As he is on record as saying that he approves of capping and also that he does not approve of it, will he share his embarrassment with us and say which of those alternatives he supports?

Mr. Gould: The hon. Gentleman is pushing his luck; there is little doubt about our position, which has been established on many occasions and which I am happy to repeat now. We oppose wholeheartedly and thoroughly the principle of capping and, as we advocate the independence and value of local government, we believe that the right controls over local government spending are those exercised by the electorate through the ballot box.

Mrs. Edwina Currie: Will the hon. Gentleman give way?

Mr. Gould: I shall give way in a moment.
It is not surprising that the Secretary of State is less than enthusiastic for the Bill.

Mr. Nicholls: On a point of order, Mr. Deputy Speaker. The hon. Gentleman is on record as having said that, in extremis, there must always be a reserve power. Is it in order for him now to say that he said no such thing?

Mr. Deputy Speaker (Sir Paul Dean): That is a matter for debate, not a point of order for the Chair.

Mr. Gould: It is not surprising that the Secretary of State is less than enthusiastic about the Bill. After all, its first objective is a massive and comprehensive extension of capping powers, something against which the Secretary of State has consistently—at least he has been consistent on that issue—set his face. The Bill achieves nothing short of the universal capping which the right hon. Gentleman proclaimed, in his famous article in The Times on 10 May last year, would be
an act of centralised power outside our experience. On those grounds alone it should be resisted.
The mere fact that the Secretary of State has nailed his colours to that mast does not mean that he will not chop it down at the first opportunity. After all, he cannot pass a revolving door without spending a couple of enjoyable turns within it.

Mr. Marlow: Will the hon. Gentleman give way?

Mr. Gould: If the hon. Gentleman will allow me to develop this point, I shall give way in a moment.
It is significant that, despite his U-turns and climbdowns, the Secretary of State has so far not recanted on that subject. His enthusiasm for the position that he has taken has been consistently maintained, as he has showed this evening. On this measure, he has been clear and vehement. In his article in The Times, he virtually issued a call to arms in defence of local government independence. Little wonder that he is so reluctant to have to eat those words and to introduce universal capping, which he so eloquently condemned in that article.

Mrs. Currie: We should all like to know the hon. Gentleman's views on capping. I heard him say, on the "Today" programme on Radio 4, on 27 March 1990, that,

in extremis, there would have to be a reserve power. Does he still think so? If not, how on earth does he propose to control public spending and inflation?

Mr. Gould: The Labour party is opposed, and always has been, to the principle of capping. We would control local government spending through the discipline exercised by the ballot box, which we would ensure was more effective because of our provision for annual elections.

Mr. Heseltine: I have listened carefully to my hon. Friend's questions. What did the hon. Gentleman mean by the words "in extremis"?

Mr. Gould: If the right hon. Gentleman really wants me to spell it out, I am glad to do so. I was answering a question that was put in such terms as to suggest that no legal controls could ever be exercised over local government spending. The point that I was making was that, in extremis, in cases of illegality or fraud, a reserve power would always be available. Anyone who understands local government would accept that point.

Mr. Heseltine: I am sure that the hon. Gentleman remembers George Bernard Shaw's well-known phrase, "We have established the principle; we are now haggling about the terms."

Mr. Gould: I happen to know the full story, but it is clear from the frozen reactions of the Secretary of State's colleagues that not many of them do. I am sorry that he failed to make his point.

Mr. Marlow: Will the hon. Gentleman give way?

Mr. Gould: No, I wish to make progress; I shall bear the hon. Gentleman in mind.
By eating his words even on capping—the one issue on which he steadfastly maintained his position for well over a year—the Secretary of State presents a sad spectacle. He is embarrassed not only because he is now forced to act inconsistently with his stirringly stated principle, but also because he knows that he was right on 10 May 1990 and he is wrong now.
No Secretary of State who claims to value local government can come to the House and proclaim that henceforth every budget for every local authority must be set within limits prescribed by central Government. However, that is the sad end of a long process that began a long time ago—it certainly seems so—with fine words that many hon. Members will remember about the poll tax reinforcing local democracy and imposing renewed accountability. The process then took refuge in a limited capping power, which the Secretary of State said was designed to restrain the largest overspenders. That process has now been swept away, and all pretence has gone that the Government are interested even in paying lip service to the principle of local government autonomy.
Let us be clear what the Bill is about. It is no longer a question of restraining the largest authorities or the most irresponsible overspenders or even—this is the point for the hon. Member for Northampton, North (Mr. Marlow)—those Labour-controlled authorities so beloved of Tory mythology. The Bill is a comprehensive statement of no confidence in the whole of local government. It does not matter how big the authority is, what its record on


spending might be or what its political control is or has been. All local authorities are now on notice that they are not to be trusted.
Under the new powers, every budget will be set within the limits imposed by the Secretary of State. Let us be clear on how extensive those powers will be. If the £15 million protection had not been in force for 1991–92, 37 districts would have spent more than 25 per cent. above their standard spending assessment, 42 would have been spending 20 per cent. above their SSA, and 55 would have spent 12·5 per cent. above their SSA. On the criteria applied for this year, huge numbers of local authorities would have had to be capped, including many Tory-controlled smaller districts.
So much for local democracy and the power of local electors to decide what services they want and what they are willing to pay for them. Henceforth, the man in Whitehall knows best. It is far from clear on what basis his judgment is to be made. Is it to be made on the basis of SSAs, which everyone now knows to be unrealiable, in which confidence is completely lacking and which, in the case of small authorities, even Ministers conceded during the passage of the Local Government Finance Act 1988, provided too blunt an instrument to fine-tune the budgets of small authorities? Is that to be the basis of the judgment imposed from Whitehall, or is it to be a criterion that measures a year-on-year increase in spending? If so, the Secretary of State may well find himself capping many districts that have restrained their spending to lower than the SSA.
The process is the apotheosis of that centralising power that the Secretary of State described. It is not an exaggeration to say that it will be the end of local government as we have known it for more than a century, until that happy day comes when we can get rid of the Government who have imposed the dead hand of Whitehall on local democracy.

Mr. Martin M. Brandon-Bravo: I am grateful to the hon. Gentleman, who is saying that, under his policy, the ballot box will be arbiter. If that is so—I believe that he will accept that in some authorities 20 to 25 per cent. of the electorate pay nothing; indeed, there are some authorities where about 80 per cent. did not pay the full rates—where on earth is the democracy? How is it democratic for that percentage of people to vote for an ever smaller number of people to pay more and more in totally unlimited spending within a local authority?

Mr. Gould: In the light of the local government election results last month, I can well understand why the hon. Gentleman is nervous about the judgment of voters at the ballot box. The answer to his question has been most eloquently provided by his right hon. Friend the Secretary of State, who said—I do not have his exact words, but I am sure that the right hon. Gentleman will remember them—that it was a complete myth to assume that large numbers of people did not pay the rates. He said that virtually everyone made some contribution, perhaps under an informal arrangement within a household or as part of a rent payment.
I hope that the Secretary of State will not do a cartwheel on that, because I have always thought that he was right on that issue, and has stuck to being right. It was a

well-taken point in favour of rates and a property tax, and in view of the wholesale conversion among Conservatives who now condemn the poll tax, I am surprised that the hon. Member for Nottingham, South (Mr. Brandon-Bravo) has not caught up with the new orthodoxy.
The fact that the Secretary of State has doubts and hesitations about capping is eminently understandable and is no doubt matches by his reservations on the Bill's second major objective—the preparations that it makes for the council tax. It enables the Secretary of State to give instructions to valuers so that a new valuation register can be prepared. The Bill's provisions must surely be an embarrassment to any Government who still pretend to be competent. We are still no nearer to knowing what the basis of that valuation will be. We have been told by the Secretary of State that it will be solely capital values.
We were then told by the Minister of State on the Radio 4 "Today" programme, of which Conservative Members are such avid listeners, that other factors might also be taken into account. When we challenged the Secretary of State in the House on which of the conflicting views was correct, he said that they both were. The Bill does nothing to clear up that confusion. That is surely one of the questions on which the process of consultation is intended to cast light, so why not wait until the consultation has taken place?
The answer to that question reveals another Government embarrassment. They have to give the impression of making rapid progress to deflect the widespread scepticism about the timetable that they have set for themselves. The Government still say that they are aiming for 1993, despite the experts' publicly stated doubts about whether that date is remotely achieveable. Only by going through the motions can the Government keep alive—at least until the election—the illusion that the poll tax is rapidly on its way out. That illusion matters, because the poll tax, far from being dead, lives on and will be here for years to come.
Already, there is widespread anger on the part of nearly half of all poll tax payers as they discover that they do not qualify for the full £140 reduction that they were promised. That anger will mount as people realise that the poll tax bills will keep coming, they will still have to live with the unfairness and unworkability of the tax and, for each year during which it survives, they will have to pay, on average, £140 per household more than they need.
That is to say nothing of the nightmare facing local government as it grapples with the problems of collecting a tax that the Prime Minister describes as already uncollectable, and which can only become more so the longer it lingers. That is why the Government have to pretend to a certainty that certainly does not exist, and why they have had to truncate the process of consultation, revealing it to be the sham that it truly is.
While I am talking about truncating processes, I understand that we are to be subjected to a guillotine motion next week for the purpose of rushing the Bill through. I give notice that we shall oppose that motion with all the strength at our command.
Another vexed question involves the number and range of the bands. The Bill specifies that it is intended that valuations should be made on the basis of bands, but it does not say how many. It does not state whether individual valuations will first be made and then assigned to bands, or whether the exercise will simply push whole chunks of property into certain bands. Whatever the


answer, we should be clear that, contrary to the optimistic noises from Ministers, there is the prospect of huge numbers of appeals when people feel that they have been placed in the wrong band.
Or course, the Government have committed themselves outside the terms of the Bill to a seven-band system, on the basis of which they have produced some figures—the Secretary of State used them again this evening—which purport to tell people the size of the bills that they will have to pay. It is worth rehearsing for a moment the history of this disreputable exercise.
At the end of February, the Government set in train an exercise that required district valuers to make an estimate—no field work was done, no valuations would be carried out—in the course of about five days which would allocate all the properties in their areas to one of 14 bands, the top band of which was £500,000 or more. Once that exercise had been done on that very shaky basis, it was presumably taken by the Secretary of State to Cabinet. When the Cabinet and the Prime Minister saw it, they did not like it: they threw it out. They insisted on substantial change, and the Secretary of State suffered yet another of his defeats.
The Prime Minister insisted that a 14-band system would be too painful for well-heeled Tory supporters, especially in the south, and he further insisted that a seven-band system, with a new top band of only £160,000, should be substituted. None of the seven bands then defined corresponded with any of the 14 bands delineated in the earlier exercise. So we are left with a 14-band exercise based on guesstimates which were then translated into seven wholly different bands— —

Mrs. Currie: So what?

Mr. Gould: The hon. Lady reveals a great deal about the psychology of Conservative Members, and thereby invalidates the very figures that the Secretary of State advanced this evening to try to persuade people that the council tax would somehow produce lower bills.
We are left, as I said, with a series of inventions based on estimates. It is on the basis of these wholly fanciful statistical inventions that the Government have produced their supposed figures for average bills. The only conclusion that can be drawn is that the Government were panic-stricken, not to say gobsmacked, and were so intent on producing any figures, however wild the assumptions on which they were based, that they rushed out figures based on total invention.

Mrs. Currie: I think that I am right in saying that the hon. Gentleman has even less experience of government that I have. Had he any experience of government, he would know that the intelligent, sensible way for Government to go about their business is to invite papers from their civil servants and to discuss various possibilities. That is exactly what the Government did. Does he not consider that a matter not for criticism but of great credit to the Government?

Mr. Gould: I do not want to be too cruel to the hon. Lady, but I think that, in the light of her record in government, she would do well to be a little less patronising. I suspect that, if we compared experiences in a year or two, we might find that the balance had changed somewhat.
The hon. Lady does not understand why a 14-band exercise which was abandoned and converted to a

seven-band exercise without proper valuation cannot be a sound basis for the figures that the Government have produced. But worse was to follow. Presumably because he knew how shaky was the statistical structure to which he had been shackled, the Secretary of State then tried to have a proper exercise carried out. District valuers were asked to carry out a nine-band exercise. But when news of that leaked within a couple of days, it was hastily aborted and the seven bands were pronounced to be the Government's last word on the subject. Consultation was at an end—again revealed as a total sham.

Mr. Marlow: rose—

Mr. Gould: No, I have given way frequently.
So the Government were panicked into inventing figures, and were then so terrified by the prospect of being charged with trying to produce verification for them—so terrified of being accused of dithering—that they panicked all over again and closed their minds altogether.
Little wonder, then, that the Government have a reputation for panicking and for mistaking panic reaction for firm Government. Where the Home Secretary went with pit bull terriers, this Secretary of State had been before him with the council tax—

Mr. Marlow: Will the hon. Gentleman give way?

Mr. Gould: No, I will conclude shortly.
Worse was to come, because the Government were now committed to seven bands with a £160,000 ceiling, and committed to the fundamental unfairness that that makes inevitable. I know that Ministers—especially the chairman of the Tory party—sometimes have difficulty in understanding this simple arithmetical point, but the fact is that an insistence on lopping off the top range of bands so that those at the top end of the scale do not pay their fair proportionate share, means, as a matter of logic, that those lower down the scale have to pay more. That is why, the Government's panic-stricken attempt to produce favourable-looking figures notwithstanding, they ended up—despite all the stastical inventions that they had felt free to use—with figures which still showed, for reasons that they clearly did not understand, that even on the most favourable assumptions their bills would be £67 per household higher on average than they would be under our fair rates proposal.
This is a sorry story of a Government who have abandoned all principle and all claim to competence. They have abandoned all pretence at considered policy-making. This Bill, like so many recent measures, is nothing more than a save-the-Government's-skin measure—but this is a Government whose skin is not worth saving.
They are a Government who require the Secretary of State to come to the Dispatch Box to defend a banding system which he knows to be indefensible, and who compel him to repudiate his own statements against universal capping. I do not blame the right hon. Gentleman for appearing to be unhappy about this humiliation. The poll tax has continued to exercise its malign influence and to cast its long shadow. I recommend that hon. Members share the Secretary of State's real judgment of the measure, and defeat this disreputable Bill tonight.

Mr. Paul Channon: It is clear from what the hon. Member for Dagenham (Mr. Gould) has said that the one thing that really annoys the Labour party is that its members can see that the Government have produced a proposal that is popular in the country and which will lead to lower bills for our constituents. No wonder the hon. Gentleman is disappointed about that. I am disillusioned with him. When one hears him on the "Today" programme occasionally, he seems to be the voice of the Labour party speaking ex cathedra, yet today we have been told that what he said on that programme was inaccurate. I understand him to be saying that in no circumstances short of fraud would he introduce—were he to be in power—any capping measures. So again the message goes out from this House that the Labour party, if in office, would do little or nothing to protect people in peril of overspending authorities.

Mr. Brian Wilson: Can the right hon. Gentleman think offhand of any good reason why he, with his substantial personal wealth and large properties, should pay only two and a half times more than the poorest people? Why should the poor subsidise him?

Mr. Channon: I have no comment to make on that except to say that I pay—rightly—a great deal more in tax than many others do.
The House should understand that this measure represents two modest steps forward. One relates to valuation. It seems to me right to press ahead with that, because, if we do not, how shall we get the tax ready for its introduction in 1993? Surely both sides of the House want lower bills for constituents.
The council tax seems to have been a satisfactory way out of the problem. The Secretary of State and the Minister of State deserve the highest credit for the way in which they have managed to defuse this issue in the past few months—[Laughter.] Despite the laughter of Opposition Members, I do not believe that the issue was thought to be significant in the recent local elections.
Great credit goes to my right hon. and hon. Friends for having come up with a solution to the problems of local government taxation that seems to be satisfactory, or as satisfactory as anything can be. No local tax will ever be popular, and no local tax is likely to be perfect. My right hon. Friend the Chancellor of the Exchequer was entirely right to alter the balance between the levels of central Government and local government spending in his Budget.

Mr. Allen McKay: Will the right hon. Gentleman give way?

Mr. Channon: We have been asked to be brief, but I shall give way to the hon. Gentleman. It is probably the last time that I shall give way this evening.

Mr. McKay: The right hon. Gentleman thinks that it is right to get the balance right between the levels of central Government and local government spending. He thinks that the measures that have been taken will result in the right balance being achieved. Why was it right in the first place to destroy the balance that then existed by cutting grants to local government from central Government? The cutting of grants year in and year out caused the imbalance.

Mr. Channon: On reflection, I think that the hon. Gentleman has a point. It is right that central Government should be responsible for a larger share of the expenditure, but both Conservative and Labour Governments are to blame. As I have said, the hon. Gentleman is on to a sound point.
The council tax has been designed so that it will not place an excessive burden on those who will have to pay it in future. The authority that has responsibility in my constituency spends close to its standard spending assessment, as does the county council and I estimate that about 93 per cent. of householders in my constituency will be better off under the council tax than they were under the poll tax or the rating system.
I cannot understand the opposition to the Bill, which will enable the new tax to come into force in 1993. If that is to be done, the process of valuation must begin as soon as possible. That being so, I wish to ask a couple of questions.

Mrs. Fyfe: Will the right hon. Gentleman give way?

Mr. Channon: I must press on. I shall speak for only a few more minutes.
I wish to ask two questions about the process of valuation. First, how do my right hon. and hon. Friends propose to deal with appeals? Secondly, although I understand the view that we do not need revaluation, surely there are certain portions of our towns and cities in which values vary considerably from time to time. Certainly there have been variations during the past few years. How are anomalies to be avoided if there is no general revaluation? I am sure that my hon. Friend the Under-Secretary of State for Scotland has the answers to my questions. I shall be grateful——

Mr. Barry Field: Does my right hon. Friend agree that there should be a regular revaluation every five years, for example, to avoid anomalies?

Mr. Channon: I am against regular revaluations. The process of revaluation is extremely time-consuming and enormously unpopular among those who lose as a result. If regular revaluations can be avoided, that is good on the whole. There will be exceptional circumstances from time to time, and I am not sure how the Bill will deal with those. No doubt the solution will come later, and it is necessary to have the Bill first. As I have said, I estimate that 93 per cent. of my constituents will be better off with the new tax.
The Bill deals only with valuation—we must press ahead with that so that the council tax can be ready in 1993—and capping. The official Opposition have explained their position with more clarity than they have done in the past. I agree with my right hon. Friend the Secretary of State that, in an ideal world, it would be better if there were no capping. Equally, it would be better if all local authorities behaved responsibly. Of course it would be better if all local authorities did not impose excessive burdens on ratepayers or charge payers. Alas, that is not the world in which we live. It is right that capping powers have been taken in the past. It is right that such powers should be used, but not excessively. It is right that early notice was given, so that local authorities knew exactly where they stood. It is right also that, at the end of the day, only very few authorities had to be capped.
I do not want to go into the details of all the district authorities that are at risk because of the removal of the


£15 million threshold. Every hon. Member will have specialist knowledge of his constituency. Surely it must be right, however, that there should not be an arbitrary threshold. Unfortunately, there are local authorities that are abusing the system and charging their ratepayers or charge payers more than is reasonable. It is right that the Government should take the necessary powers, which they will not be able to exercise until next year at the earliest.
The powers are especially relevant when we consider the position of some small authorities. I have no doubt that there are many local authorities that have special cases to bring to the Government's attention. For example, my hon. Friend the Member for Wealden (Sir G. Johnson Smith) was arguing a short time ago that the authority that has responsibility in his constituency is a special case. That, of course, can be considered. In general, however, the proposed powers should exist. I am sure that any authority with a special case will be able to take it up with the Government, and that my right hon. and hon. Friends will be entirely reasonable. Perhaps my hon. Friend the Under-Secretary of State for Scotland will have time to say something about that when he replies.
Those of us who think that the council tax will be a great improvement on what has preceded it, and those who believe, as I do, that the Government have defused a difficult situation by changing people's thinking about local government taxation, and therefore deserve our congratulations, should press on and ensure that the council tax will be ready by 1993. To do that, valuation must take place at the earliest possible date, and if that is to be done we must have the powers that are set out in the Bill. It would be wrong for the Opposition to seek to delay the Bill's progress, as they were saying a short time ago. It is essential that the Bill passes through the House at an early date. I hope that it will do so in the very near future, so that my constituents and the constituents of many hon. Members will face lower bills in future than in the past.

Mr. David Bellotti: In October 1987—

Mrs. Fyfe: On a point of order, Mr. Deputy Speaker. There will be hon. Members contributing to the debate who have considerable personal wealth. Any benefit that they enjoy as a result of the Government's proposals will be merely a cherry on the top of the cake. Surely they should declare an interest when they speak.

Mr. Deputy Speaker: The House knows the rules about declarations of interest. Had the right hon. Member for Southend, West (Mr. Channon) had any interest to declare, I am sure that he would have declared it.

Mr. Bellotti: In October 1987, the then Minister for Local Government, the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), who is now Secretary of State for Employment, said:
Under the new system of the community charge, local authorities will become fully accountable to their electorates.
I wonder what happened to that possibility. I wonder also why we have been presented with draconian capping powers. The Minister added:
Let me make it clear that we are only taking such powers because of the appalling record of a dozen or so authorities".
The capping powers that are before us will extend well beyond a "dozen or so" authorities, as we all know.
In 1988, the Minister said that the exemption limit of £15 million was being proposed because the community

charge levied by authorities that spent less than £15 million accounted for only a fraction of the total community charge when the precept of other authorities is taken into account. If the Minister believed that then, what has changed tonight? He explained that, from his point of view, it was unnecessary in the context of protecting local charge payers for local authorities that spend more than £15 million to be brought into the ambit of charge limitation.
The capping powers before us are certainly draconian. If implemented, they will attack our public services at the grass roots. In introducing the Bill, the Secretary of State said that he wanted something that was appropriate to the system. Many hon. Members want local services appropriate to local needs and do not put the system before the needs of people. Most of our discussion should centre on the SSAs, and the House should conclude that, in the past, SSAs have been proved unfair and discredited. Local authorities of all political persuasions can be used as examples of that.
Of the local authorities that would have been caught in 1991–92 under the powers that are now being sought for the following year, 37 that are now exempt from capping plans were planning to spend more than 25 per cent. above their SSA. A further 42 planned to spend 20 per cent. above their SSA, and 55 planned to spend more than 12·5 per cent. above SSA, which is an important figure in the Government's current thinking about limiting the spending powers of local authorities. The Government will have either to cap an enormous number of local authorities, or to change the rules and introduce different details.
Liberal Democrats believe that those local authorities should be free to set their budgets, and should be accountable and answerable to their local electorates. There have recently been many local authority elections in which local people considered the manifestos of the political parties and made their judgment. They then elected councils of different political persuasions.

Mr. Richard Holt: Would the hon. Gentleman care to tell us in which local authorities a political party produced a manifesto that was fully costed?

Mr. Bellotti: I visited Torbay—I do not know whether the hon. Member for Torbay (Mr. Allason) is present, but I am not seeking to gain an advantage if he is not—where the manifesto had been costed, and I had the pleasure to launch that manifesto. I could give other examples. Political parties in local elections across the country do their best to cost the programmes that they put before the electorate. That is honourable, and credit should be given to them by members of all parties in the House.
The local elections resulted in the Conservative party's losing more than 900 seats. We should have confidence in the local electorate, and produce the programmes that they supported. By introducing capping powers, the Secretary of State is saying to those electors—some of whom voted Conservative, but most of whom voted for other parties—that they will stop people who have been properly elected from delivering the programmes that they promised. That is not only grossly unfair; it hits at the heart of democracy. That is why the Liberal Democrats are opposed in principle to capping.

Mr. Barry Field: Would the hon. Gentleman include in his comments the manifesto of the Liberal Democrats on


the Isle of Wight? The proprietor of the new ice rink protested to the leader of the Liberal Democratic party because it had told a deliberate lie. The leader declined to comment. The proprietor of the ice rink was rather upset, because he was a lifelong Liberal.

Mr. Bellotti: I have never been ice skating, so I am not well qualified to comment. However, I had the pleasure of visiting the hon. Gentleman's constituency a few months ago. I hope that that had some bearing on the fact that the Conservatives lost overall control of both the district councils on the Isle of Wight.

Mr. Field: That is not true.

Mr. Bellotti: I believe it to be true.

Mr. Field: It is untrue.

Mr. Bellotti: That fact can easily be verified.
In amongst the flak that the Secretary of State is now getting because of the draconian measure of capping authorities that spend less than £15 million, I notice the flak of a furious Roy Thomason, the chairman of the Association of District Councils. He has not previously been against the Government's draconian measures, but on this occasion he is. What he said is relevant:
We appear to have a Government that is being run by the Treasury for the sake of Treasury convenience".
If previously ardent Government supporters such as Roy Thomason issue such public press statements, the Secretary of State must take on board the feeling across the country these draconian measures.
My constituency includes part of the areas covered by Wealden district council. I am glad that the hon. Member for Wealden (Sir Geoffrey Johnson Smith) mentioned the council earlier, and I want to add something to what he said. His point was well made, and what he said was true, but he could have gone on to say that, if the Secretary of State follows the line that he has followed in previous years in capping local authorities, and if that is applied to Wealden on current spending plans, it will lead next year to a cut in its budget of £400,000.
By no stretch of the imagination can a local authority such as Wealden district council be accused of being profligate, expensive or extravagent. It is a well managed, well run authority, which can often be encouraged to develop its programmes rather than cutting them. I do not know where Wealden will find £400,000 worth of cuts.
The chief executive of Wealden district council said that, unless the proposals were changed, there would be a
breakdown in the provision of local services".
That statement was supported by the leader of the council.
One of the reasons for such comments is the ridiculous situation of the SSAs leading our thinking. Wealden is a member of a family of similar local authorities. I sue the term "family" in the context of the Audit Commission's recognition that Wealden is in such a family of local authorties. In that family, SSAs vary from £88 to £173 per head of relevant population.
Surely the Government can see that the SSAs should not be the starting point for their consideration of local government spending.

Mr. Barry Field: Will the hon. Gentleman give way?

Mr. Bellotti: I shall give way to the hon. Gentleman for the last time.

Mr. Field: I am obliged to the hon. Gentleman for giving way to me a second time.
Surely the hon. Gentleman is not imputing a political overtone to this matter. He must be aware, as the local government spokesman of his party, that the Edwards committee in the 1960s recommended that there was a shortfall in rating revenue for the Isle of Wight. We created the document "Island Apart" to prove the increased cost of local government on the Isle of Wight. That is a regular feature of local government in the United Kingdom. Surely the hon. Gentleman is not suggesting that it has suddenly arisen under the present Government.

Mr. Bellotti: It has certainly worsened under this Government, because, since 1979, local government has lost £58 billion of central Government support. In 12 years of Conservative government, that loss of revenue has led to local authorities becoming less enchanted with the Government.
I want to make some progress now, because other hon. Members want to speak. I want to refer to one other local authority—my own, in Eastbourne. I mentioned that Wealden council might have to make £400,000-worth of cuts next year unless the Government changed the rules and gave way to representations.
The figure for Eastbourne borough council is almost £1 million. One could not regard Eastbourne council as extravagant or profligate. In addition to the delivery of local services, Eastbourne council needs to generate the local economy in areas such as tourism to bring wealth to the town.
If £1 million-worth of cuts in Eastbourne and £400,000-worth of cuts in Wealden would have to be made, we must call on the Government to listen to representations from across the country, and to think again about their proposals. The leader of the council in Eastbourne, Alan Shuttleworth, said that the proposals
take no account of the needs of our communities and attack basic services, which local people depend upon.
I now ask the Government to consider a separate matter concerning Eastbourne. In addition to their current proposals, the Government are asking that the cost of short-term leases on houses be transferred from the housing revenue account to the general fund of local authorities. That will add another £250,000 to Eastbourne's expenditure, purely because of the way in which the costs are transferred. That must affect other local authorities as well. The Government must consider that specific point and whether there is any possibility of excluding that from the present arrangements.
When this Government first came to office, they began to attack local government, and local government has now lost £58 billion. We saw what happened to the Greater London council and to some of the metropolitan authorities. The Government then capped some of the larger spending authorities. Tonight, the Government want the House to approve the capping of smaller spending authorities. Where will it all end? Will it end with the parish councils and the local town councils? Will the Government attack local community groups on local councils? Will the Government stop local councils providing park seats, bus shelters and litter bins? Where will the draconian measures end?
When I consider the Government's attack on local authorities, I am reminded of the words of Pastor NiemÖller: "First they came for the Jews, and I did not speak out—because I was not a Jew. Then they came for the Communists, and I did not speak out—because I was not a Communist. Then they came for the trade unionists, and I did not speak out—because I was not a trade unionist. Then they came for me—and there was no one left to speak out." Local government has been attacked, from the GLC down to the parish councils. People must stand up and dig in. If they do not, every local authority will be attacked by the Government—if it has not already been attacked.
The proposals in the Bill are ridiculous. I was asked earlier about costed manifestos. Well, the Bill refers to costing valuations; it says that the valuation of property will cost £250 million. There are 21 million properties in this country. How do the Government think that a property can be valued for £12? Many people would like to know that. The Government have not costed their proposals. They simply want to attack local authorities. Some hon. Members are prepared now to stand up and support local authorities.

Mr. Barry Field: On a point of order, Mr. Deputy Speaker. It is a tradition of this House that Front-Bench spokesmen take care not to mislead the House. The hon. Member for Eastbourne (Mr. Bellotti) is the local government spokesman for the Liberal Democrats. I distinctly heard him say that, as a result of the local elections, there was no overall control in the two borough councils on the Isle of Wight. That is quite incorrect in respect of Medina borough council, because it remains under Tory control despite the fact that it was one of the three borough councils, which included Salisbury council in the constituency of the Under-Secretary of State for the Environment, my hon. Friend the Member for Salisbury (Mr. Key), to be specifically targeted by the hon. Gentleman's party. I am sure that the hon. Member for Eastbourne did not intend to mislead the House, and that he will want to put that right.

Mr. Deputy Speaker: That is a point of dispute between two hon. Members; it is not a matter for the Chair.

Miss Emma Nicholson: This small but important Bill is a large step towards well managed local authority expenditure. The Bill is crucial, and the banding is a sane and sensible way to define a good and accurate measure of local personal input. The capping is crucial for fairness. It will protect local people from large expenditure by local authorities and protect the central taxpayer who now provides the largest proportion of locally expended money.
With the large rises in local authority expenditure, capping universally has become a necessity and a step towards the correct management that I will define. Local authority expenditure has increased by nearly 25 per cent. in only two years. We want to see whether we have received better value for money by a similar proportion. Have we received 25 per cent. better value for money from the central taxpayer and the local charge payer? I think not, and that must be why central charge capping is

necessary. Lambeth council has not offered 25 per cent. better value for money in terms of local expenditure over the past two years.
We must also consider the quality of work carried out by local authorities. My hon. Friend the Minister for Health earlier considered local child care institutions. She told us that expenditure on such institutions has increased by 60 per cent. over the past 11 years and the number of children in care has decreased by 40 per cent. over the same period, but, despite that enormous fresh sum of money and fewer children, the quality of work has clearly deteriorated.
The basic premise that local authority expenditure is created from the central taxpayer and the local taxpayer rests on redistribution to achieve acceptable standards throughout the country. However, that does not apply to education. There may be a first class sixth form in one school, but in a school in a different area where education has been over-politicised, generally speaking by Labour party councillors, the standards of education may be very much lower. The redistributive formula has not—alas—led to higher standards when local authorities have been left to get on with the job. Unrigorous thinking through over-politicisation has led to an unacceptable lowering of standards. Perhaps we should dub that "Bookbinderism". That kind of thinking allows public money to be spent lavishly to score political goals in respect of ordinary commodities such as school writing paper.
Local people now want to pay less central and local tax and they demand the best services. Clearly, when we consider the way in which Labour councils in particular have been behaving, those services are not being provided. That is why the restructuring of local government responsibilities must follow the charge-capping powers in the Bill and the methods of extracting funds both locally and centrally through banding. We must focus on cutting out waste, rewarding good management and restoring real accountability.
We must agree that there is a huge amount of dead wood in local authorities, particularly in Labour-controlled local authorities. In Labour local authorities, there seem to be whole forests where nothing moves and where there is such a stench of decay that it is clear that the living forest has decayed almost into a combustible fuel that is due to go up in smoke.
We all want local accountability, a fair charge and a reasonable way of ensuring that the local charge payer is not taken for a ride by the local councillors. It does not seem possible to achieve that under the local system, although I wish it was. The central charge-capping provision will protect the local charge payer and ensure that we take the next steps forward and work out the best possible mechanisms for redistributing local authority responsibilities and expenditure. By that method, I am confident that, by 1993, we will be able to present to the electorate a sane, sound and sensible system whereby that key 15 per cent. raised locally is spent wisely and well.

Dr. Norman A. Godman: I should like to speak about the Bill's relevance to the people whom I represent and hope to represent for a few more years.
My constituency is bedevilled by scandalously high unemployment. Increasingly, the communities that I


represent are aging because, in response to that scandalously high unemployment, many young people in my part of Scotland are resorting to the traditional Scottish solution, which is emigration. At the weekend, I said goodbye to a young electrician and his wife who are heading for Australia. He is emigrating because he is sick of being out of work on the lower Clyde.
Many of my elderly constituents need the first-class services provided by the social work department of Strathclyde regional council. In Scotland, the Government party is in the minority and recent opinion polls show that the Conservatives have a 23 per cent. rating. It is likely that some Scottish Conservative Members will not be returned to the House at the next election.
The odd job lot at the Scottish Office are seeking to emasculate local government. Ian Bell, the well-known Scots journalist whose distaste for the Conservative party is equalled only by his dislike of Labour Members and councils—I have some cross-party support for that observation—wrote yesterday about the Secretary of State's decision to cripple Lothian region through its budget. In yesterday's Observer Scotland, that famous Scots journalist—some hon. Members might say infamous—said:
What the Government is doing to Lothian Region is a national disgrace. It is victimisation of the crudest, most partisan sort, and Labour deserves the support of every Scot in its attempts to fight it. The trouble is, I'm not clear about what the party or its Lothian councillors propose to do about the Scottish Secretary's decision to cap the region's poll tax and force 18·5 million of budget cuts.
It's no piddling amount by anyone's standards. In Lothian it could mean the closure of schools, old people's homes and children's centres, an end to free bus travel for the aged, the closure of evening classes, a jobs freeze and cuts in road repairs. Compulsory redundancies cannot be ruled out.
Strathclyde regional council has to make a bleak, stark choice between making huge cuts in its budget or increasing its poll tax next year. The Secretary of State for Scotland has made his intentions as plain as possible. He said:
this is a long-term step change in the central-local taxation relationship. If local authorities find themselves under tighter control in future because of accountability to the national taxpayer being more rigorous than accountability to local residents, they can reflect on the fact that they had their chance to be more responsible in their approach."—[Official Report, 26 March 1991; Vol. 188, c. 872.]
Earlier in the debate, we heard that same distinction drawn between national taxpayers and local residents, as if the two were mutually exclusive. I remind the hon. Member for Torridge and Devon, West (Miss Nicholson) that local residents pay national income tax. It is absurd to distinguish between local residents and national taxpayers. The Secretary of State's intention is plain for all to see.

Mr. Dalyell: I am a Lothian Member, and I have never known a Scottish Secretary of State who was so vindictive towards a local authority. Does my hon. Friend think that such behaviour is honourable when, on every criterion, the Secretary of State's own authority of Dumfries and Galloway is spending more than Lothian region? The Secretary of State's behaviour towards his own authority in relation to what he has done to Lothian borders on the grossly dishonourable and even corrupt.

Dr. Godman: My hon. Friend asks me to offer an observation on the conduct of the Secretary of State for

Scotland. Despite the temptation, I cannot say that his conduct is dishonourable because you, Mr. Deputy Speaker, would ask me to withdraw such an allegation. When one compares the two councils mentioned by my hon. Friend the Member for Linlithgow (Mr. Dalyell), it appears disreputable. Such discrepancies are not lost on the Scottish electorate. The Secretary of State and his colleagues will pay for them at the general election—when they call it.
The local authority seeks to provide all kinds of services for my constituents. It has a good integrated transport system. Because of the conduct of the Secretary of State and his predecessor, the regional council has already had to make cuts in those budgets that are designed to help vulnerable people. I shall give one example. Section 12 of the Social Work (Scotland) Act 1968 gives local social work departments a budget that can be used to help people who are facing severe problems, such as domestic violence.
Such a case was brought recently to my surgery. It involved a young woman who was desperately anxious to get away from her psychopathic husband. She was able to return to her home in Birmingham using the money given to her by a local social worker under section 12. The budget for such cases allocated to the district manager, Mr. Donald McQuade, of the social work department, Greenock, has been drastically cut and is nothing like what is used to be. That fine 1968 Act allows social work departments and those much maligned professionals, social workers, to assist people, but the budgets have been cut. That reflects badly on the Secretary of State.
I shall give another example of Strathclyde regional council being unable to provide decent welfare facilities for my vulnerable constituents. In the centre of Greenock, almost alongside the famous custom house in Custom House lane, the Fitzgerald training centre for those suffering from mental handicap takes in students or trainees, not only from my constituency but from the constituency of my hon. Friend the member for Renfrew, West and Inverclyde (Mr. Graham). It is bursting at the seams. The building is riven with damp and has inadequate facilities. My hon. Friend and I received a promise from Strathclyde regional council's social work department that a new centre would be built in Greenock, but we have now been informed that, because of cuts inflicted on its budget by the present Secretary of State, there is no chance of that desperately needed centre being built within the next three or four years—if the present odd job lot remain in power.
The home help service for my elderly constituents is also being cut back. There will be other cuts, because the Secretary of State has Strathclyde regional council fixed firmly in his sight—if not his own regional council.
As to clause 3, the banding range does not seem to be large enough. There should be about 14 or 15 bands, with a top banding for properties valued at £500,000 or more. There are few houses of that value in Scotland, but those who live in them should pay their full whack.
When the Minister replies, perhaps he will say a word or two about rights of appeal against valuations and what form the procedure will take. Will an individual have the right to take an appeal to the sheriff court or even to the Court of Session? Will there be a system of appeals tribunals? We have not yet been given answers to those important questions.
The Bill is a disgraceful measure, from a Government who seek to destroy local government in Scotland. There


is no principle behind it. The Bill has been devised because Scottish local government is overwhelmingly anti-Conservative party.

Mr. Robin Squire: I hope that I may reassure to some degree the hon. Member for Greenock and Port Glasgow (Dr. Godman). This time last year, those of us in England and Wales were hearing bloodcurdling tales about the cuts in front-line services that local authorities would be required to impose and the mass redundancies that they would need to make. However, the National Association of Local Government Officers—which I am sure the hon. Member for Greenock and Port Glasgow accepts is not a Tory front organization —found that councils such as Brent, Basildon and Lambeth made no cuts in front-line services and announced no redundancies. That is not to say that there will be none, but it is clearly the case that, when certain proposals are made, councils talk up their implications —but the reality is something much less worse.
I have frequently expressed in this Chamber my scepticism about capping. I have listened to the arguments for and against over the years, and have eventually become convinced, sadly, of the necessity of capping as a last resort. The need for it flows directly from the behaviour of a small number of authorities, but, unless capping remains available, the number of errant authorities will grow. If there is to be capping, it is difficult to argue against the logic of extending it to the majority of local authorities —including the district councils that are currently outside the system.
Presumably, the hon. Member for Dagenham (Mr. Gould) has gone through a similar intellectual exercise, and has worried about whether or not capping should exist. Our only problem is that he seems to have reached the conclusion that it should not exist, whereas he is on record—as my hon. Friend the Member for the Isle of Wight (Mr. Field) said—as confirming that Labour wanted to retain capping as a last resort. If Labour now thinks that capping should not exist, that is a very recent conversion. My guess is that, in the unlikely event of Labour finding itself in power, it would quickly need to devise ways of restraining a small number of local authorities.
I want to comment briefly on standard spending assessments. The hon. Member for Eastbourne (Mr. Bellotti)—who, perhaps understandably, has temporarily left the Chamber—missed the point, because I remember him telling the House that the Government had substantially reduced the proportion of expenditure that is borne by central Government. That is true, but the logic of that statement is that, to the extent that a lower percentage of local authority expenditure is met by central Government, so, relatively speaking, is there less impact from the operation of SSAs. One cannot have it both ways. The hon. Member for Eastbourne rather overlooked that point.
I take the view that there is a continuing need for many refinements to SSAs. I say that on behalf not only of my own council of Havering but of many other authorities, including Doncaster, Barnsley, and Sheffield.

Mr. Holt: And Langbaurgh.

Mr. Squire: Langbaurgh, too, I am told by my hon. Friend. Certainly the other three that I mentioned are not Conservative-controlled authorities, but, like Havering, they have become convinced that the bases of the SSAs are invariably drawn against them. The reasons have been well ventilated in a number of debates, and I will not repeat them now. However, I urge my hon. Friend the Minister always to keep that aspect in mind. Right hon. and hon. Members in all parts of the House who have investigated it in detail are convinced that we have not yet found the best answer.

The Parliamentary Under-Secretary of State for the Environment (Mr. Robert Key): I hope that my hon. Friend will accept my assurance that, in the latter part of every year, local authorities have an opportunity to discuss their SSAs with Ministers. That is done on a regular basis with a large number of local authorities. There is barely an SSA that is not at some point adjusted as a result of such representations—and of our discussions with local authority associations. We are very mindful of the concerns that right hon. and hon. Members in all parts of the House express.

Mr. Squire: I am grateful to my hon. Friend. He would expect me to say that we will be even more grateful when his comments are translated into perceived higher figures for all the local authority areas that currently feel themselves to be discriminated against.
The main part of the Bill prepares the ground for the new council tax. I welcome unreservedly the form that it will take, but will comment briefly on the details of its operation that have so far been made available. I recognise that it did not have to follow the introduction of the council tax, but I welcome the fact that those on income support, and one or two others, will no longer be required to pay. I can see why the House was convinced that they should pay, but enough evidence has shown the difficulties that local authorities and those on income support have experienced for us to realise that it is an improvement to take them out of the local tax system.
I welcome anything that does away with regular revaluations. Labour Members from north of the border should urge their colleagues from England and Wales to be slightly less fulsome in their support of the rating system, as they have more recent experience of rating revaluations. Like other hon. Members, I expect that the existing system of rebates will be transferred, so that the more generous system that we enjoy will continue.
The Government have proposed seven bands, whereby the largest property will pay two and a half times as much as the smallest. That seems right, because many people, especially elderly people, live in homes that they acquired many years ago, when their incomes were higher. I should hate them to be unreasonably penalised, as they would be by a system based only on valuation. Whether the system is based on seven, eight or nine bands is an important detail, but that is the right range.
Most important is the provision for relief for the single adult householder. Conservative Members need to reiterate that at every opportunity. Hon. Members who are allured to the old rating system and wish to return to it as soon as possible must explain to every single adult household in the country why should they suffer from the same burdens as they did under the old rating system, which were the main reason why the system was


discredited. I have no hesitation in commending the Government's recognition of the problem of the single adult householder.
What would be the alternative? What do those who oppose the Bill—we now understand that both opposition parties do so—put forward? We know what the Liberal Democrats want, but I shall not stretch your tolerance, Mr. Deputy Speaker, by going into detail on a local income tax. Suffice it to say that it would lead to many more problems in practice than its adherents believe in theory.
The Labour party does not believe in a local income tax, but wants a return to a rates system. Many in the parliamentary Labour party come from Scotland and will be aware of up-to-date rating values, but values in England and Wales date back to 1973 unless the house was constructed after that date. Therefore, the values for the majority of properties are ridiculously out of date. That would be bearable, perhaps, if that were the only problem, but rates carry the criticisms that I am reiterating and that many Labour Members have made over the years, and no doubt would privately still be making had it not become official Labour party policy.

Mr. Donald Dewar: I am falling into personal temptation in intervening, but I am genuinely curious. The hon. Gentleman is making an impressive point about the out-of-date nature of the valuation base in England and Wales. Does he believe, therefore, that the new so-called council tax will require regular revaluations? What does he make of the promise made, I think, by the Minister of State, Department of the Environment, that once a property has been placed in a band it will remain there in perpetuity?

Mr. Squire: The hon. Gentleman makes two good points. The first and reasonably clear consequence of a banding system is that it would not need the same frequency of valuations as a system without bands. Once a house is in a band, it would be likely to stay within it, and the movement of values in the area would, broadly speaking, be in line. The hon. Gentleman's second point was whether it would, stay there in perpetuity, and the answer is that it would, subject to major improvements. The hon. Gentleman knows that the discussion document recommends that the valuation should be adjusted at the point of sale of the property. That also makes much sense and avoids many valuation changes that would make relatively little difference.
As far as I understand it, the Labour party proposes four different values in an uneasy alliance, involving replacement and rental values that, by implication, would be reviewed annually. I urge Labour Members who understand these things to look carefully at what they are pledged to. I do not expect them to agree with the Government's proposals—that would be asking too much —but they have wide experience and they know that, if the Labour party's proposals are remotely as I have suggested, they do not make sense. In their own interests, let alone the interests of better discussion of local government finance, they should do a bit more homework.
I believe that the Bill is a simple Bill that is justified. It will herald a good and better system for local government taxation and I give it my full support.

Ms. Hilary Armstrong: I rise to speak with some weariness. The Government have meddled with local government finance and must hold the record for the number of Bills introduced to adjust or change local government legislation. I note with interest that there has been little enthusiasm for the Bill among Conservative Members. It seems, having listened carefully to the Secretary of State, that the Government are in a hole and are digging themselves deeper into it because they know of no way out. We do—a general election—but the Government are frightened of that.
I intend to be parochial. I usually hope not to be so, but I wish to speak specifically about clause 1 and the problems that it will cause district councils such as Derwentside and other small district councils, which have suffered from enormous industrial devastation in the past 20 years and are trying to deal with the consequences.
It was interesting that the Tory leader of the Association of District Councils gave the Bill a warm welcome. His press release says:
A furious Roy Thomason, ADC Chairman, declared: `We appear to have a Government that is being run by the Treasury for the sake of the Treasury convenience.
I am shocked that the Government should be threatening small-spending district councils with these centralist controls. The budgets involved are trivial sums in terms of overall public expenditure.'
Those sums may be trivial in terms of overall public expenditure, but they are critical to the survival of areas such as Derwentside and to the way in which they can deal with the economic devastation of the past decade.
Other districts in Derwentside are also vulnerable because of the ludicrous standard spending assessments. The SSAs are inapplicable to small district councils which have particular problems, and they do not match needs.

Mr. Holt: While specifically criticising the SSAs, will the hon. Lady home in on the aspect in Durham and Langbaurgh with which she particularly disagrees? Is her reason based on the fact that that area does not get large sums under SSA, like Langbaurgh, because they do not have a large immigrant population? If so, does the hon. Lady wish to have a large immigrant population in Derwentside to get more SSA?

Ms. Armstrong: That intervention is somewhat bizarre. I am arguing that SSAs should be related to an area's needs.

Mr. Holt: They are.

Ms. Armstrong: I am sorry, but they are not. When regional policy was actively pursued in the north, much money was spent on infrastructure—for example, on making sure that our housing was adequate. That made us ineligible because of the way in which SSA is calculated. I shall not pursue the discreditable views of the hon. Member for Langbaurgh (Mr. Holt). I wish to talk about the needs of my constituents.
Before last month's elections in Derwentside, the Conservatives held three seats—they now hold only two.

Mr. Holt: How many do the Liberals have?

Ms. Armstrong: The electorate have had their opportunity to give their verdict on the Government's legislation and actions. They made that clear in Derwentside.

Mr. Holt: What about the Liberals?

Ms. Armstrong: The district council is overwhelmingly Labour, gaining an overwhelming vote of confidence from the electorate at the elections.

Mr. Holt: How is Derwentside doing under Labour?

Mr. Deputy Speaker (Mr. Harold Walker): Order. The hon. Member for Langbaurgh (Mr. Holt) must not persist in heckling from a sedentary position. I hope that he will desist.

Ms. Armstrong: Derwentside district council—

Mr. Holt: Now will the hon. Lady answer?

Mr. Deputy Speaker: Order. I very much hope that the hon. Member for Langbaurgh will not disregard my advice.

Ms. Armstrong: Consett is located in the Derwentside district. In 1980, the economy of Consett and the surrounding area depended on the steel industry and related industrial activity. Because of the nature of the area and the town's location, the problems facing the district during the past decade are, thankfully, unique. Over the past few years since the last general election, Ministers and Conservative Members have lectured me about the economic miracle in Consett and told me that I should be grateful for the increased activity and should not run down my area when pointing to its needs.
None of the regeneration would have been possible had it not been for the determination of Derwentside district council, which went into partnership with the public sector, the voluntary sector and whoever was prepared to invest or to work in the area—it was prepared to do whatever was necessary and possible to attract industry and support. It cost the electors of Derwentside money, but they took, and take, the view that, if they had riot been prepared to contribute, their area would die. Because of their determination to have a future for themselves, their families and their community, they were determined to contribute to attract support from the European Community, central Government, regional agencies and the private sector. Derwentside industrial development agency is a model for many other parts of the country of the way in which public and private sectors can work well together. It cost money, but it has not solved all the problems.
Over the past year, measured unemployment in Derwentside has risen by 16 per cent. and 3,925 people are unemployed. The unemployment figures in Henley, the Secretary of State's constituency, are slightly different. Unemployment rose by 150 per cent. during the past year, but the number of people unemployed in his constituency is one third the number of Derwentside. The base in Derwentside is a much bigger problem to overcome.
Serious problems still exist in Derwentside. The council decided that it had a responsibility to fight for economic regeneration, so it spent to ensure a future for the area, even though regional support through the regional development agency has declined significantly over the past decade. Now the council is told that, by making that commitment, it is going against the Government's views of what an authority of its size should spend. The Government have no idea of the problems that the area faces. A council has a responsibility in those circumstances

to meet the needs of its population and to work with it to secure a future. An enormous amount of work must still be done.
If the Government succeed with the Bill, they will be saying to the people of Derwentside, "We do not see you as having any future. We are not prepared to support you in creating a future and opportunities for the people you serve." I cannot support such a Bill or such vindictive action, and I hope that Conservative Members will think again.

Mr. Patrick Nicholls: I suspect that it will be a good few years before we hear the last word on the community charge, but even at this stage one can make two points which will probably command some support from Conservative and Opposition Members. First, the community charge was not perceived as fair; secondly, whatever the right amount should be, it was clearly costing too much.
On the question of fairness, there is no way in an imperfect world that there will ever be agreement across the board about what is a fair basis for local government taxation. Having said that, it has become clear to me from the many people to whom I have spoken in my constituency that even though some have misgivings about the council tax, it is seen on the whole as being fairer. In an imperfect world, that is probably the most that we could expect.
The amount is crucial because I suspect that if we had got the amount right in advance, people would not have picked away at the concept of the charge to decide whether it was fair. We did not get the amount right and the amount was too high. It is one thing to ask how much the amount should be and one can bandy figures around. It may be difficult to define what a fair amount is but, in the end, one can see what is fair. It has seemed to me for a long time that the way to arrive at the appropriate amount for a local government tax is to shift some expenditure back to central Government. It seemed clear to me that, in these days, 25 per cent. is probably too large a proportion of expenditure to expect a local authority to raise. It is now 14 per cent. as a result of the measures taken in the Budget by my right hon. Friend the Chancellor, which seems about right.
Even if we now have a structure which is fair, and even if we now have a mechanism to ensure that the amount is seen to be fair, that can only work provided that one absolutely crucial point is made—we must ensure that the amount that a local authority can raise in local taxation is to some extent controlled.
One of the miseries from the community charge debate and one of the things that may yet make it worthwhile is to try to learn what harsh experiences sometimes teach us. I have seen the operation of the community charge from inside and outside Government, and it seems that the critical aspect is to recognise that no control mechanism will work except capping. The theory was great. The theory was that, in some way, the system would police itself; that, if a local authority levied at too high a level, the electorate would in the end deal with that and there would be a self-correcting mechanism. It is a tremendous theory, which makes perfect sense, provided that it is only talk. In


reality, it did not work. Any responsible way of approaching the problem must acknowledge that simple fact.
There are probably three principal reasons why we did not succeed in producing a situation in which the electorate would pass their own judgment on the level of the community charge in a particular area. First, in many parts of the country it is unrealistic to think that there would be a meaningful change in the complexion of local party government. Some areas are strongly Conservative, whereas others are strongly Labour. In my experience, it is unrealistic in such areas to think that there will be such a sea change in attitude that the community charge, or the local government tax, can be controlled.
Secondly, if it is correct to say that the electorate will pass judgment, they can do so only after the charge has been introduced. The electorate are never able to pass judgment beforehand or at the time. Therefore, even if there is some electoral retribution around the corner, it does not happen soon enough. In the meantime, a locality may have imposed on it a community charge which is unjustifiable. A considerable time might elapse before the electorate can do anything practical about it. Once again, the system breaks down.
Perhaps the most important reason why leaving the decision to the electorate does not work is that, faced with the responsibility of saying that their local authority is at fault, the good old British electorate will instead blame the Government. It has been an interesting experience to receive correspondence from people who readily admit that they understand that their local authority is responsible for setting the level of the charge, but who nevertheless decide that the Government are to blame.
What happened in my district council is an interesting example. It is an issue with which I hope that my hon. Friend the Under-Secretary will deal. I do not think that hon. Members are especially aware of the circumstances in my district council. The charge that it set was certainly larger than I should have liked, but it paled into insignificance when compared with what happened in many Labour-controlled areas. It was interesting to see how the debate took place locally. There was an expectation that the local council would set a community charge in line with the SSA. The debate was heated, and there was an initial vote. It seemed as though a proposition had been carried and as if a charge would be introduced at a certain level. There was then a recorded vote on a narrow majority.
Suddenly, the electors of Teignbridge were faced with a community charge which, although nothing like as great as would have been imposed in a Labour area, was being imposed in an area with no overall Conservative control where people noticed that it had been set at a far higher level than the Government would have wanted. When people wrote to me about that, they acknowledged that the Government were not directly at fault because the local council had set the charge, but they asked, "Why on earth did the Government not see it coming? Surely all your experience of local government was such that you must have realised that, given a free hand, some local authorities will spend."
Authorities may spend from the best of motives, but if we want to see an ultimate discipline imposed on local

authorities, we cannot leave it to the electoral mechanism because that will not work, and we have seen that in practice. People said to me that it might not be the Government's fault on this occasion, but capping powers exist. They argued many times that such powers are used only in the grossest of cases and should be applied more widely.
One of the things that I hope to find out, now that the £15 million exemption has been removed, is at what level the Government are prepared to tell a local authority that they have confidence in the SSAs, that they will negotiate with the local authority but, if the local authority goes beyond a certain level, what degree of excess the Government are prepared to sanction.
The starting point must be that we have confidence in the SSA mechanism. I was once on the inside and had responsibility on a day-to-day basis for the calculation for that formula. It was possible to see that it was fair and uniform and that, in the process of negotiation, it could be made to fit as best as could be in a particular area. If the Government believe that the SSA is an appropriate level, it seems strange that the charge will have to be very much in excess of it before the Government step in. I am aware of people who have been in local government—as I have —who say that that is ridiculous and that the Government are detracting from the right of people to elect their own representatives and that they should have the final say.
I am in favour of people having the final say; I am in favour of democracy. But let us make no mistake—local government is the creation of the House of Commons, which must take the ultimate responsibility for revenue raising in this kingdom and, at the end of the day, the people will decide that, if they do not like the Government of the day, they will put that Government out of office. That is the way it should be, and I have no complaint about that system.
For a local authority to pretend that it can set up an alternative sovereignty and say that its judgment, and not that of the House, must prevail is an extraordinary proposition. Too often, we mouth such sentiments as, "It must be a matter for the local authority—we mustn't interfere." Sometimes we must get back to first principles and the first principle in this issue is that the House of Commons must make the ultimate judgment, and bluntly, the House and the party of Government will be put out if the electorate disagree with the choices that they make.
We are debating Government policy and it is right that we should. However, when people assess the worth of the Bill and examine the provisions in it, they will want to know something about the alternatives. I found it fascinating—I say that with all the insincerity at my command—to see the hon. Member for Dagenham (Mr. Gould) thinking desperately on his feet trying to work out how to explain that, in extremis, there must always be a reserve power to cap. His explanation was that it was something to do with fraud. We all know that, with matters of fraud, one does not have to a reserve power to cap. We all know that fraud can be dealt with in any event.
The hon. Member for Dagenham apparently forgot what his earlier explanation was. At one time, it was not fraud. He said:
It's really just a hypothetical question to ask us to define what would be extreme circumstances. What I am saying to you—I am not ducking your question in any sense—I am saying in extremis that reserve power would have to be reserved, but it's impossible to say in advance what those circumstances would be".


There we have it from the hon. Member for Dagenham. There will be the terrors of the earth, but he is not certain what they are.
We heard this evening a wriggling, squirming and giggling assurance, which came through in the end, that a Labour Government would not cap. On 15 February 1991, the hon. Member for Dagenham was asked what he would do about a 60 per cent. rise. He said:
Well I don't see, even then, that we would want to come in … and cap".
That was his attitude. In a sense, one would expect nothing less from the Labour party; one could say that, in the end, the hon. Member for Dagenham came clean under some pressure and admitted that that was his attitude.
What I found extraordinary was to hear the hon. Member for Eastbourne (Mr. Bellotti) in no way try to dissociate himself from that proposition. He was eager, anxious and positively bouncing to associate himself with the Labour party.

Mr. Bellotti: indicated assent.

Mr. Nicholls: The hon. Member for Eastbourne is nodding his assent now. He has made it clear that he too would see no restrictions imposed——

Mr. Bellotti: indicated assent.

Mr. Nicholls: I am glad to mention the hon. Gentleman's sedentary assent, so that it can be recorded in Hansard. The hon. Gentleman made it clear, and continues to do so, that he can see no circumstances for capping.
The hon. Member for Eastbourne mentioned a passing acquaintance with local government in the west country. I remind him that we too can remember the experience of Liberal affairs in local government in Devon. We can remember a time only about five years ago when a Liberal administration was kept in power in county hall by the Labour party. The price that the Liberals were prepared to pay was to agree to abolish Devon's last grammar school. The reality of Liberal Democrats in local government is that they will always jump into bed with the Labour party in the end. It says much for the Labour party that, in the end, even it found the association with the Liberals so disgraceful that it felt the need to withdraw.
In the end, the House of Commons must act as the ultimate protector against the exploitation of the people. Without proper capping powers, that exploitation will continue. The experience of the community charge has been bad and painful enough. It would be unthinkable for us not to be prepared to learn from our mistakes. The pity of it is that the Labour party and the Liberal Democrats have shown tonight that they are quite incapable of learning from a mistake. Mercifully, that charge cannot be laid against the Conservative party.

Mr. Dick Douglas: I want briefly to follow the hon. Member for Teignbridge (Mr. Nicholls) in his constitutional analysis of the protectors of the people. In a few months—we do not know how long it will be—we shall go to the country in an election. I very much doubt whether any hon. Member will say blandly to the electorate that the real protection of the rights of the people is the House of Commons. Candidates will be pleading for votes, and there will be little discussion, especially in Scotland, about the legislative sovereignty of

the United Kingdom Parliament. There will be a great deal of speech-making about the sovereignty of the Scottish people. That shows clearly to me one of the major failures of the House of Commons, which was revealed in the nature and thrust of the speech by the hon. Member for Teignbridge.
The only part of the United Kingdom that had the poll tax in front of it, in legislative terms, was Scotland in 1987. The people of Scotland overwhelmingly rejected the poll tax, but the Government and the House of Commons in particular paid little or no attention to them. The Bill is a panic measure in a retreat from what could have been foretold—the tenacity of the people of Scotland. It is the result of ignoring the views of the people of Scotland, and of the massive campaign of righteous civil disobedience and non-payment in Scotland.
We have moved a considerable way. The hon. Member for Greenock and Port Glasgow (Dr. Godman) is not in his place. I understand his reasons and I am not referring to him pejoratively. He referred to an article on Sunday by a Scottish journalist, Mr. Ian Bell. The hon. Member quoted a remark by Mr. Ian Bell which showed that, on this occasion, he was speaking in terms that were not unfavourable to the Labour party. Mr. Ian Bell concluded by saying that "Labour opposes and Lang disposes".
What does Labour do when the Secretary of State uses powers that have been called "corrupt" by the hon. Member for Linlithgow (Mr. Dalyell)? Does Labour say, "Lie down and obey the law," or does it show some tenacity in its opposition? Perhaps the hon. Member for Glasgow, Garscadden (Mr. Dewar) will give us some idea of Labour's intentions when the capping powers are used, as they are being used in a sense by the Secretary of State at present.
In a point of order, I made an allusion to the nature of the Bill. It is a tawdry Bill. In view of the lack of Scottish legislation going through the House at present, there should have been a unique and specific Scottish Bill to deal with the matter expeditiously in relation to the position that prevails in Scotland. One way or another, we would have been given the opportunity of doing what is amply justified in terms of fairness. We could have abolished the poll tax in legislative form; it has already been abolished in practical terms because of the attitude of the Scottish people. We would have had the opportunity to abolish the poll tax not in 1993—if the Government persist in office —but in 1992.
There are two ways in which the poll tax could be abolished. The first way is not entirely favourable to me, but might suit the hon. Member for Garscadden. We could introduce a Bill to reintroduce the rating system. I understand that that is the short-term Labour party measure, and it could be done.

The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart): Long-term.

Mr. Douglas: I may have it wrong, but I understand that it would be a short-term measure and that Labour has longer-term proposals, with which I do not want to deal tonight. The idea is that the Government of the day would reintroduce the rating system. In Scotland, the basis for rating is not too outmoded because of the recent revaluation, which caused us all the difficulties in 1985. It might be uprated without too much difficulty in terms of inflation.
I argue far more strongly that, given the time scale between now and April 1992, we could introduce a local income tax for Scotland without great difficulty. I do not argue the same case for Britain or for the United Kingdom as a whole, but I suggest that, in Scotland, the mechanism is there and that we could do that.
What have we gone through all the paraphernalia to do? We are considering the collection of about £800 million by means of a massive process of banding, valuation, revaluation, assessment and appeals, which would run in harmony with the poll tax registration. It is completely unnecessary. Why do I think that it is unnecessary? I shall repeat comments that I have made before, because they do not seem to be getting through to the electorate. [Interruption.] The hon. Member for Garscadden sniggers. Does he or anyone else in the House know any people who pay their rates or poll tax out of anything other than income? I do not know anyone who sells his paintings or other capital assets in order to make his contribution to local revenue. Everyone I know pays out of his income.
A tax related to income should be an income tax. We hear strictures from the Opposition about the change in the balance of taxation. They say that the Government have altered the balance from direct to indirect taxation. Might I ask the hon. Member for Garscadden whether it is the intention of the Labour party to go back on that? Would a Labour Government reverse the increase in VAT and return to a rate of 15 per cent? Those are important considerations for the electorate.

Mr. Allan Stewart: Does not the hon. Gentleman want an answer?

Mr. Douglas: I do not expect an answer, but the points that I make are important and must be put on the record.
We have seen an alteration in the gearing of local government funding. In Scotland, only £1 out of £10 of local authority revenue comes from what will be called the community tax or council tax. There may have been an argument in the past for using fairly draconian powers to cap local authorities because a substantial amount—up to 25 per cent.—of local expenditure was raised locally. Where is the thrust of that argument now in relation to gearing? The Government have no confidence whatever in the local economy or local accountability. A local income tax would create local accountability. It is possible to go either way. Other countries raise a much higher proportion of their revenue from local income tax than the United Kingdom.
I was heartened today by the decision of Grampian regional council, which is Labour-controlled, to support a local income tax. The vote was 23 Liberal and Scottish National party members for and eight Tories against, while Labour members, who could not make up their minds, abstained.
There is a further point in favour of a local income tax in Scotland. We could dispute the figures. We asked the Secretary of State to supply his own figures. He did so, but we dispute them. I wish to put it on the record for the Scottish National party that the necessary £800 million or so could be raised by a Scottish income tax of about 3·5p or 4p in the pound.

Mr. Allan Stewart: No.

Mr. Douglas: The Minister disagrees, but that is a matter for discussion and analysis by both hon. Members and experts. I am willing to have such discussions with the Minister.
To substantiate my support for a local income tax, I quote from the report of the Institute of Fiscal Studies. Although the institute argued initially for a property-based tax, the report says:
In the longer term, however, if it is intended that local taxes should contribute more to the costs of local government, we see no alternative to the eventual introduction of a local income tax, either as a supplement to, or replacing, property taxation".
That is a considered view.
I argue forcibly for a local income tax in Scotland by 1992. It would be possible to introduce it if there was the will to do so. The only objection comes not from Scotland but from the United Kingdom Treasury. That objection would persist whether a Conservative or Labour Government were in power. If we are to return to fundamental autonomy and accountability, local authorities must have a flexible and buoyant source of finance. The only one that would work is a local income tax.
In his speech, the Secretary of State did not deal with some detailed points. I am aware that some of the points that I intend to raise may be Committee points, but I fancy that we shall have a truncated Committee stage. Therefore, with your indulgence, Mr. Deputy Speaker, and that of the House, I shall ask the Under-Secretary to explain several points.
Clause 2(2)(a) refers to
an excessive increase in those expenses over the total estimated expenses there mentioned of the local authority in respect of the financial year".
What legal backing do the Government have for that definition? What does it mean in legal terms? Who will determine what is excessive? That is a fair point.
An open-ended suggestion is made in the proposed section 3A in clause 2(2)(b). It says:
Different principles may be determined under subparagraph (3) above for different classes of local authority and the Secretary of State may classify local authorities for the purposes of this sub-paragraph by reference to such factors as he thinks fit.
What does that mean? What criteria will be used when the Secretary of State forms a view of what he thinks fit?
Clause 3(9) says:
The Secretary of State may be order amend, or substitute another definition for, any definition of domestic property for the time being effective in relation to Scotland.
What is the nature of the power that the Government seek? It is an open-ended power. The Secretary of State could make up his mind and impose on us any definition of domestic property that he thought fit.
We are told that clause 4 applies to England and Wales only. Clause 4(6) contains significant definitions of the charging authority, the community charges registration officer and the valuation officer. None of them applies to Scotland. The Bill contains no definition of a valuation officer in Scotland. The Secretary of State said that the Commissioners of Inland Revenue would be the top dogs. This is a new procedure, under which the local assessors in Scotland would not be asked to work in harmony with the Commissioners of Inland Revenue. I am open to being convinced otherwise by the Minister, but as I read it, the local assessor will be subordinate to the Commissioners of Inland Revenue. As far as I am aware, that is something new.

Mr. Allan Stewart: The hon. Gentleman makes several perfectly proper and constructive points The Commissioners of Inland Revenue will ensure consistency of approach north and south of the border. The responsibility for carrying out valuations will lie with the assessors.

Mr. Douglas: I am sorry to pursue the matter, but that is not what the definition of a valuation officer says. I refer the Minister to clause 4(6), which says:
'valuation officer' means any officer of the Commissioners of Inland Revenue who is for the time being appointed by them to be a valuation officer or a deputy valuation officer for the purposes of the valuation under section 3 above.
The Parliamentary Under-Secretary of State will have an opportunity to clarify that when he winds up, which I would welcome.
My major objection is to the regulations that could be made under the Bill, which is an important one for local democracy. It is a departure from the procedures that have existed hitherto. It will be an enabling Bill, but the Government have the audacity to provide in clause 7(3)(a) that the power to make orders will be done under the negative procedure for statutory instruments.
It surprised me that the hon. Member for Garscadden made no real attempt to state what the Labour party would do if and when it entered office to overcome the massive difficulties that local authorities are encountering in ending the poll tax.
In the interim, the Government have a responsibility to abolish the poll tax a year earlier in Scotland. I have suggested some ways in which they could do that, and they have a major responsibility to consider the collapse of local authority finance in Scotland. The Government cannot wash that away and say that it is a result of massive campaigns of non-payment. The situation has been imposed by the Government, and anyone with credibility in the Government has a responsibility to consider what is happening in Strathclyde, Lothian and other regions of Scotland. The Government will rue the day if they do not take action immediately.

Mrs. Edwina Currie: I rise to support the changes in the Bill as I think they are very welcome indeed.
May I take the House back to the question of capping powers that are included in the first part of the Bill? My main local authority is Derbyshire county council, led by the estimable Mr. Bookbinder, who is rapidly becoming known throughout the country, as we have known him for some time in Derbyshire, as the epitome of irresponsible local government. It is a Labour-controlled authority and it was capped last year. Its budget was reduced from £560 million to £520 million which, given the size of Derbyshire and the fact that on the whole we have relatively few problems, is one hell of a lot of money to be spending and to be lifting from local people.
This year, Derbyshire has not been capped and that gives point straight away to the suggestion that the existence of effective capping powers has a substantial effect on the councils concerned. The very fact that the powers exist means that often they do not have to be used. Fewer councils are being capped this year than were being capped last year, and some of the councils that were capped last year, such as Derbyshire, have decided to behave themselves, with the consequence that they are

being much more sensible. As a result, in Derbyshire, the budget is up 7 per cent.—just a smidgeon under 7 per cent. —from last year to around £556 million. That is exactly the amount to the whisker that the county council could increase its budget to under the stated capping rules set out by my right hon. Friend the Secretary of State for the Environment last autumn without being capped this year.
I would suggest that Labour-controlled county councils such as Derbyshire are very cute indeed about the capping procedure. They know exactly what the rules are, they are smart enough to work it all out, and they are being entirely and thoroughly cynical about the way in which they operate the rules. Let me illustrate one result of their cynicism.
Last year, Derbyshire county council was capped but, hey presto, there were no redundancies. This year, the county is not capped and has seen a 7 per cent. rise in its budget. Suddenly, 400 teaching jobs are to go, other redundancies have been announced, music lessons have been cut, swimming lessons were stopped in March, libraries all over the county have been closed and museum pieces have been sold to raise money, which has resulted in the authority being thrown out of the Museums Association and thus losing grants. In other words, everything has gone completely berserk up there, and my constituents are extremely worried.
What puzzles me about this is that, if there has been an increase of 7 per cent. of spending in Derbyshire—a 7 per cent. increase is not a cut—why do we need any redundancies at all? What on earth does the county think it is playing at? Other councils have been capped and made similar judgments, and if they can manage, why cannot Derbyshire manage as well?
If one takes the trouble to read Public Service, the newspaper of the National and Local Government Officers Association—NALGO—one sees that Basildon has made it clear that it can be capped without cuts and redundancies and that Bristol and Lambeth have also made that clear. That leaves open the question: why do we need redundancies in Derbyshire at all?
The answer is that we do not need redundancies in Derbyshire. They have occurred in the most cynical way possible. It would have been very easy for the council to keep within its budget in the way that other councils have kept within theirs since councils were created, by, for example, marginally increasing some charges. The council has failed to increase, and has made a virtue of its policy of refusing to increase, the charge for school meals for 10 years. Therefore, much of the spending has gone on an increased subsidy for school meals. That subsidy is not to free school meals which are covered by statutory policy, but to others. Children in my constituency and that of the hon. Member for Derbyshire, North-East (Mr. Barnes) arrive at school in big cars and yet have their food subsidised because the council believes that without the subsidy they would not eat. What absolute, impossible, irresponsible nonsense. That is where much of the increased spending in Derbyshire is going.

Mr. Harry Barnes: What has that to do with the Bill, which is about poll tax capping for authorities with budgets under a certain size and relates to, for example, South Derbyshire district council? Does the hon. Lady feel that South Derbyshire needs such a Bill?

Mrs. Currie: I do not think that the hon. Gentleman has been listening. Perhaps if he listened a bit more he would learn a bit more. If he more willingly paid his own community charge and gave a lead to the whole of Derbyshire to do that instead of pretending that people on salaries of the kind that we pick up here should not have to pay anything, I should listen to him more carefully. I shall do him the courtesy of listening to him again.

Mr. Barnes: The hon. Lady is behind the times, because my community charge has been paid. I was not going to leap to the position in which it would cross into another financial year.
The hon. Lady's circumstances are such that she gained considerably from the operation of the poll tax and now wants further legislation that would benefit her still further. She has benefited from the £140 reduction, she benefited from the original legislation, and now she seeks to benefit from this Bill. If the hon. Lady wants to talk about individuals, she should talk about herself.

Mrs. Currie: The hon. Gentleman did not pay a bean until he was threatened with a summons. He and his colleagues in the north of the county had to be threatened with being taken to court by his own Labour-controlled council a year after he received his community charge bill, like all the rest of us. He has a long way to go before he has any credibility. In response to his point, let me say that I am interested in protecting all my constituents, from the very poorest upwards. I am trying to do my best to protect the hon. Gentleman's constituents as well.

Mr. Brandon-Bravo: My hon. Friend touches a point when she speaks about trying to protect the poorest and most vulnerable in our society. She has spoken of the cuts and redundancies that Derbyshire introduced for purely party political purposes and for the publicity it wanted to achieve. Does my hon. Friend accept that much the same happened in Nottinghamshire? It was not capped and had a substantial increase in its budget, but to make a political song and dance, the council wanted to close 12 old people's homes. Happily, it was its own supporters that forced it off that political nightmare.

Mrs. Currie: My hon. Friend, who is also my neighbour, is absolutely right. In my home county, school meals alone are now subsidised to the tune—an admitted tune—of over £13 million, while cuts are being sought to the tune of £16 million. Derbyshire needs no cuts, and it would be easy for the county to balance its books. The cause of the problems in Derbyshire, Nottinghamshire and other such councils is not the Government's action on capping but cruel, stupid and short-sighted administration at county headquarters. I am convinced that, before the end of this financial year, members of Derbyshire county council will be disqualified from public office—and good riddance, too.
This debate not only concerns Derbyshire but is of national significance—[Interruption.] Opposition Members have spoken about their constituencies and would criticise me if I did not speak about mine. I am delighted and honoured to have the opportunity to do so in the House, and shall continue to do so after the next election—so they can put that in their pipes and smoke it.

Mr. John Maxton: Did the hon. Lady vote for the poll tax Bill? If so, did she do so for one of the good reasons that was put forward by the

Conservative party—because it would make local government accountable? Accountability means giving local councillors the right to take decisions and to pay the price through the ballot box. Why is the hon. Lady now so much in favour of removing that accountability?

Mrs. Currie: I shall follow the hon. Gentleman down the route that he suggests. I voted for the community charge legislation, and have always voted for accountability in local government. I spent 11 years in local government and developed a considerable knack at spending enormous amounts of public money and explaining myself afterwards to the electorate. The hon. Gentleman is really saying that the Labour party has a devil-may-care approach to running the economy, which is of far greater concern than the accountability of local councils.
I understand that the Labour party is, more or less, against capping, although some Labour Members talk of reserve powers. Indeed, Opposition Members from Derbyshire have been amongst the strongest advocates of doing away with capping and say that they would rely on the ballot box. That was the approach that we took and it does not work. I wish to heaven that it did. The hon. Member for Glasgow, Cathcart (Mr. Maxton) has only to look through today's vote and the blue pages of more than 800 motions signed by hundreds of hon. Members to see how often we would vote for more money to be spent and how seldom we would vote, in this House, this country or this world, for taxes to be raised to match that spending. That is the problem
Over and over again in local government, in my constituency, in the wards that I represented in the city of Birmingham and the wards and constituencies of Opposition Members, we find that, given the chance, people vote to spend more money and to defer the tax or have it sloughed off on to somebody else. That is human nature and is, ultimately, why this Bill has been introduced.

Mr. Brandon-Bravo: Perhaps my hon. Friend would like to develop this point a little further in the light of the comments of the hon. Member for Eastbourne (Mr. Bellotti), who was, I believe, speaking on behalf of the Liberal Democrat party. He said that, over the past few years, local authorities should have had another £58,000 million. That figure was based on spending during a period when there had been spending limits and capping on those local authorities. I do not know whether the Liberal Democrats and the Labour party would impose limits or whether that £58,000 million would then become £68,000 million or £100,000 million. Where on earth do they believe that that money will be found? It is the biggest con that I have ever heard.

Mrs. Currie: May I suggest to my hon. Friend that the money would come from the same place as it has always come from when Labour Governments have been in office and when Labour Governments have been backed up by Liberals because they have not had a majority in the House. It would come from the printing press. It is the easiest thing in the world to print or borrow money, and to see inflation rise and then wonder why it has risen. The net result of all those promises would be an increase in taxes, borrowing and inflation—there would be no choice —because that is the inevitable result of the promises and policies that Opposition Members offer.
The appalling speeches that we have heard from the Opposition tonight show that the Labour party is not ready or fit to govern—

Mr. Maxton: We are going to govern.

Mrs. Currie: No, they are not going to govern. That is what the hon. Gentleman said before the last election and the election before that, and look what happened. Indeed, that is what they said before the 1979 election. The electorate knows that the Labour party is incapable of running the economy because it makes promises that it cannot, could not and should not keep. There is no such thing as Labour probity or prudence on public spending. The fact that it is against the Bill proves that.
The Labour party would replace the Audit Commission with a quality commission, which appears to be designed so that more money can be spent instead of being kept under control. It would abolish compulsory competitive tendering which, by any measure, has produced major savings and improvements in quality in local government. The Opposition would have regional assemblies so that, on top of Derbyshire county council, we would have a regional assembly in the east midlands. My hon. Friends and I would have to cope not only with parish councils, district councils and county councils but also with a regional assembly. I presume that that, too, would be financed out of thin air. I remember when we got rid of west midlands county council, which we brought in, and how no one noticed that it had gone because it did nothing of value. Heaven help us.
It is apparent that the Labour party has no policy to control local government spending. It is simply against ours and against every sensible effort that we make in Bills such as this. Their approach is neither subtle or intelligent nor plausible. Capping is absolutely necessary in the national interest. It is part of the long hard struggle to reduce inflation and to keep it down. Clearly there should be no exemptions, and that is why the Bill is necessary.
The greatest pity of all is that we did not take such a measure when we introduced the community charge in 1990.

Mr. Maxton: In 1989.

Mrs. Currie: I agree with the hon. Gentleman, as he is right about that.
We should have taken powers in 1989 to cap every local authority in the country, knowing that it would probably not be necessary once those powers existed. If we had done so, I am sure that the introduction of the community charge would have been much less traumatic. Councils would not have been able to increase spending and load it on to the community charge. We may have been able to keep our promise of a community charge of about £250, which is the present average, and it is possible that we would not have needed to seek a third system of local government finance in as many years. However, I am convinced that the third system will be better than the previous two. If I say it often enough, I may convince my electors, too.
I hear the bone-crunching sounds of a Government who have learnt their lesson. My right hon. Friend the Secretary of State said that they do not intend to be caught again. However, in the background I hear the snorting

noises of a Labour party that has not learnt its lesson about inflation, and never will. On that basis, I am more than happy to support the Bill.

Mrs. Maria Fyfe: During this lengthy debate, I have been making a careful note of the issues that Conservative Members seem to feel have some substance. The hon. Member for Derbyshire, South (Mrs. Currie) said that it was necessary to cap councils as part of the Government's macro-economic control of the economy, but at the start of the debate my hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) asked the Secretary of State to explain how councils making local decisions would affect the country's economy in a macro-economic sense, to which he received absolutely no answer. The answer has never been given. Conservative Members keep asserting that that is so, but never give evidence to prove it. There is quite a weight of academic evidence to show that the idea is nonsense.
The hon. Member for Teignbridge (Mr. Nicholls) gave three reasons why councils had to have their poll taxes capped. His first curious reason was that a council can go on and on, never change hands and remain in the power of one party. Most distressing to him was the idea that a council could remain in the hands of the Labour party for years and years. It does not seem to have occurred to the hon. Gentleman that that is so because the local electorate want it and, if and when the day comes that they are dissatisfied with the council, it will be removed from office. That is why there are elections on a fixed term of every four years. Incidentally, that is a fairer system than the one in Parliament, where the Prime Minister holds the starting gun and can decide to hold an election when he or she feels that the time is appropriate.
The hon. Member for Teignbridge also said that the local electorate could not respond to decisions that they did not like because the time span involved meant that they had to respond too long after the decisions were made. He must think that his local electorate are incredibly stupid and have short memories if he believes that they cannot recall decisions made by their local authority that they did not like. All of us, particularly those who have been involved in local government, are well aware that local authorities do not always please all the people all the time. People can be annoyed with some decisions, but in local elections most electors have the common sense to make up their minds based on the whole scheme of things, not one issue that may have annoyed them two or three years before. They take the rough with the smooth and decide accordingly on the general performance of the party running the council and the opposition parties.
The hon. Member for Teignbridge offered another curious reason why councils need to be capped—that people decide that, although they are dissatisfied with local government, central Government are to blame. Could they not be right? Perhaps the Government are to blame for the decisions that the council have to make. We have only to think of occasions such as tonight when the Government are giving themselves powers to impose on a council decisions that the voters of that council did not want and clearly voted against. It is understandable but not satisfactory that people react by blaming the local council. When they decide that the Government are to blame, they are perfectly correct.
One Conservative Member said that one reason for imposing capping was that some people who vote in local elections do not pay rates and so are not entitled to a say. That is a curious argument that we have heard throughout the debates over the years about central Government control of local authorities. It was pointed out that, in reality, nearly everyone paid a share of the rates by making arrangements within families and households. Even if that were not so, it does not seem to have occurred to that Conservative Member that people who do not pay income tax have the right to vote in a general election. Is he saying that that should not be so? If so, let him say so clearly now. The principle is exactly the same: if one is entitled to vote for national Government whether or not one pays taxes, one should be entitled to vote for local government whether or not one is able to contribute to the local authority coffers. To say otherwise is simply an attack on the poor, because the only people who would be ineligible to pay would be those without the funds to do so.
Although it will be 1993 before the poll tax comes to an end, people are still being forced to live with it. Councils that are desperate to spend money on much-needed services are having to advertise and take out large, almost full-page, adverts in newspapers urging people to pay their poll tax bills. People have been under the mistaken impression that they need no longer pay because the Government have put an end to the poll tax. It is an act of gross irresponsibility on the Government's part to allow people to believe that, because the poll tax is being brought to an end, there is no need to pay it. The Government should convey more clearly the message that the poll tax will not come to an end till 1993. They are not facing up to their responsibility to ensure that they play their part in running local authorities. Far from contributing to what councils need, the Government are already capping local authorities in Scotland. The case of Lothian council has already been mentioned.
Earlier in the debate, some of us asked why the Government felt that there should be seven bands, and those fortunate enough to come within the highest band would have to pay only 2·5 times what those on low incomes and in poorer housing who fell in the lowest band would have to pay. I said that surely, if some hon. Members were so wealthy that they were immeasurably better off than others, were in the top band and were voting in the House, they should declare that fact when making their speeches. Conservative Members cried out that that was the politics of envy. In reality, we are talking about the politics of greed and of people who are extremely well off. As my hon. Friend the Member for Dagenham (Mr. Gould) said, if some people save money, other people —those who are far less well off—end up paying a higher proportion of their low incomes. However, that is not the worst of it: such people pay more and suffer the effects of cuts in local authorities.

Mrs. Currie: Will the hon. Lady give way?

Mrs. Fyfe: I shall give way in a moment.
Conservative Members have argued that we need not believe it when councils forecast large cuts, because they are not necessarily accurate. Conservative Members say, "Don't worry—it won't turn out to be as bad as they predict." Let me tell the hon. Member for Derbyshire,

South in particular that the Secretary of State for Scotland is currently forcing Lothian council to make budget cuts of £18·5 million, which is not, as Ian Bell said, a small sum of money in anyone's terms. It is a reality, not a day dream, that Lothian council is having to consider closing schools, old people's homes, children's centres and evening classes, bringing to an end free bus travel for the elderly, and cutting road repairs. Will the Government say which, if any, of those proposals they think would allow acceptable and decent levels of service? They never answer that question, but tell the councils to make the cuts and leave them to pick up the pieces as best they can.

Mr. Allan Stewart: Why does not Lothian council simply adopt the budget increase of Strathclyde—the hon. Lady's authority? If Lothian had done so, it would not have been subjected to selective action.

Mrs. Fyfe: That was an incredible intervention, when we bear in mind that Strathclyde council faces major cuts and will have to decide how to cope with them. [Interruption.] The people of Lothian voted for Lothian council's policies because they approved of them.

Mrs. Currie: The hon. Lady and I will ignore the comments of the chaps sitting around her who are trying to stop both of us speaking. Would her point about wealthy people paying more apply also to the hon. Member for Linlithgow (Mr. Dalyell), who lives in a castle, to the right hon. Member for Leeds, East (Mr. Healey), who has done well out of the sale of his autobiography—I congratulate him on that—or to the hon. Member for Kingston upon Hull, East (Mr. Prescott), who lives in a castle and who drives to work in a ruddy great Daimler?

Mrs. Fyfe: The hon. Lady seems to miss the obvious point. Some Opposition Members are considerably better off than the average person, but they are not trying to dodge their responsibilities and get out of paying their fair share. That is the difference. Some Conservative Members are doing that, and have been doing it for years. That is their whole raison d'etre: making sure that the better-off can dodge their responsibilities, sometimes by allowing employers who are subsidised by the taxpayer to pay low wages and sometimes by other dodges that have been thought up in the past 12 years.

Mr. Dalyell: To return to the Minister's intervention, does my hon. Friend accept that, on the figures, Strathclyde receives £914 per capita on the budget estimates, and £733 in respect of Government support per capita? Lothian's figures are £922 and £645 respectively, so the Minister's attempt at a comparison with Strathclyde was quite wicked. The figures for Dumfries and Galloway are £941 and £762. So what has happened to Lothian is a matter of pure political vindictiveness and spite.

Mrs. Fyfe: My hon. Friend is absolutely right. He made a point about the Secretary of State's own area earlier, and the right hon. Gentleman failed to respond to it.
I ask again: which cuts should Lothian make which the Government believe would be acceptable? People voted for those services and it is sheer effrontery on the part of the Government, who can muster only 10 seats in Scotland and only tiny minorities in local authorities, to turn aside electors' decisions in this way.
Ian Bell's article in The Observer has been mentioned. He was of course right to attack the nature of the cuts and the way in which the Government are undemocratically imposing their will on the people who voted for the services provided in Lothian. The article comes up with one way of opposing such cuts which the Labour party has not yet contemplated. Bell asks:
Why not resign and allow the Tories to administer their own cuts? Why not fight local elections on this one issue?
I do not see the point in—perfectly legally—resigning a seat and standing again for election. Councillors who had resigned their seats would have to stand on doorsteps asking local electors who voted for them in the local elections to do so again. Householders would want to know why, to which councillors would have to reply that they were seeking authority for the council to keep to the budget that it had set. Householders would rightly say, "We gave you that authority when we voted for you in the local elections. Why do you want it all over again?" If elections are held anyway and these councillors are re-elected, will the Government cave in? Not a bit of it. They will continue to impose their will because they believe that they have a sacred right to impose their views on local authorities, regardless of the outcome of local elections.
I certainly admire Mr. Bell's support for people to have what they voted for, but I suggest that his remedy does not work. I keep on telling people that if they believe seriously that local government should be local government and not an arm of the state—if they believe that it should have the right to run local authorities—there is no recourse but to vote at the general election for a party that genuinely believes in local autonomy, local democracy and local government. That is the answer. It is not an exciting one, but it is the truth, and soon the time will come when people can vote for such a party.

Mr. Martin M. Brandon-Bravo: Like many other hon. Members I came to the House with a background of quite a few years as a local councillor at county borough and district level. That was a satisfactory and worthwhile role, yet until I had been in this place for a year or two I had not truly appreciated the enormously important role that local government plays in our national life. I would be the first to admit, eight years on, that I probably appreciate even more now the necessary part that local authorities play and that they must go on playing it.
I am a great devotee of the role of local authorities. Although I understand the growth of anxiety in the past couple of years, I do not subscribe to the view that local authorities are too troublesome or that local finance is too complicated—"Scrap it all; let's do it all from Westminster." It would be tragic if that view were adopted, and I hope that it does not get to the starting gate.
Way back about 20 years ago, there was an understanding between this place and local authorities that here in Westminster resided the sovereign power, the law makers and the guardians of what the nation could or could not afford to spend. The parties were agreed on that. I do not recall capping in those days but I do recall that if the Government of the day in their wisdom wanted to rein in expenditure, as was their right, local authorities did their best to comply. All that was necessary was a circular from the Secretary of State at the Department of the Environment, or whatever it was called in those far-off

days, and we in local government did our best in response. It never occurred to us in a major county borough such as Nottingham, whether Labour or Conservative-controlled, to do otherwise, because we accepted that the Government reside in Westminster.
All this changed, sad to say, when too many people began to think—and, almost by accident, legislation began to speak—of local government instead of local authorities. They began to think of local authorities as little governments in exile with almost unlimited powers in their areas. Piling absurdity on absurdity, such people developed the notion that someone else should pay.
The Labour party talks about the generality of taxpayers. In an intervention, I drew attention to the large sum that the Liberal Democrats say should have been given to local government. I do not believe that that sort of money is ever likely to be available. The change in philosophy and the loss of understanding between central and local government led to everything going badly wrong. The Liverpools, Sheffields, Hackneys and Lambeths have much to answer for when we reflect on the relationship between this place and local authorities over the past few years.

Mrs. Currie: Does my hon. Friend agree that the real tragedy that underlines the stupidity of the cuts that have been introduced by some Labour-controlled councils is that the most vulnerable in our society are hurt? Social services budgets are cut and old people's homes are faced with closure. Even in areas such as my constituency, libraries and other facilities are proposed for closure. In many instances, there is nowhere else for people to go. It is the very people who socialists tend to say they are trying to protect who are hurt the most in Labour-controlled authorities.

Mr. Brandon-Bravo: My hon. Friend is right. Whenever a Labour authority is faced with trying to restrain its budget, its immediate reaction is, "Who are the most vulnerable in our society? If those people are hurt, there will be headlines in the local press. We shall be able to say that the wicked Tory Government are forcing us to stop meals-on-wheels services or to cut home-help provision." It is always the sector that deals with the most vulnerable people which is under threat. Those are the people who are nailed to the wall by the so-called caring Labour party.
If the Labour party and the Liberal Democrats want a vast sum to be found in addition to that which is already spent, and that is no small sum, and if expenditure is to be unlimited, who do they think will pick up the bill? I fear that those who are in a position to do so—the enterprising, the highly educated and the highly qualified—will not stay around waiting to be robbed, and penal taxation comes down to plain robbery.
Under the Labour Government there was penal taxation. Income tax was levied at 83 per cent. in some instances, and it was possible to be faced with 98 per cent. taxation. Even the basic rate which the ordinary working-class person paid was 37 per cent.—and that was before national insurance. In those days, we came to realise, as we are saying now, that a Government can have 40 per cent. of something, which is better than the Labour Government's take, which was 100 per cent. of nothing. In many instances, the Labour Administration lost because of emigration. That must not happen again.
When the opposition parties talk about unlimited spending, we must remind them that the able, the skilled and the highly qualified will pack up their bags and go. It is a small world, and we cannot ask people to stay loyal when they are being robbed through penal taxation.
I have no doubt that it is necessary for the Bill to be enacted. As my hon. Friend the Member for Derbyshire, South (Mrs. Currie) said, "Oh that we had had draconian capping powers when we voted willingly for the concept of the community charge." When the bills came through for the first year—I accept that this is a simple rule of thumb but the result would have been not one cut—we could have provided that no local authority could spend a penny more than it had spent the previous year plus the rate of inflation. I agree that that is a somewhat simplistic approach but it serves to make my point.
If that approach had been adopted, the community charge overall would have been £2·5 billion less than it was, roughly £70 less for every adult in the United Kingdom. As my hon. Friend the Member for Derbyshire, South said, "Oh that we had had that sort of limit imposed when we changed from the rating system to the community charge." Who knows, perhaps the charge would still have failed, but we would have had a charge reasonably in line with what we thought it would be when we voted for the enabling legislation. If that had been done, it is possible that we would now be in a different ball park.
I hope that the powers in the Bill will be as tough, or even tougher, when we have the new tax. For the first, perhaps, two years I would like to see an absolute limit on spending, so that the new system can be seen and judged on its true merits—and, unlike the old system, cannot be wrecked because authorities up their spending to discredit it. Let us not fool ourselves; many local authorities were determined to ensure that, whether they agreed or disagreed with the community charge, they wrecked it by whatever means at their disposal.
In my county council, the charge was upped by over £100 for every adult in our city. I thought that that was outrageous, but we could do nothing because my lords and masters—my senior colleagues on the Front Bench—never believed that local authorities could be so wicked as to screw their constituents to the wall by charging them an extra £100 for the pleasure.
Even now, after all the publicity and the details that appear on our community charge bills, I still receive the usual crop of queries from constituents. They ask why on earth they are charged some £20 for excess county council spending when they live in the city. If ever there was a case for a great city such as Nottingham to be able once again to run its own affairs, what has happened in the past couple of years says it all. That change cannot come about too soon—yesterday, please, Minister.
It is a pity that, having taken powers to cap authorities, we have not taken powers to force local authorities to collect their dues and taxes. Uncollected dues and taxes should not be lumped on to the backs of the innocent majority. Perhaps the district auditor should have the power to take action where, in his view, the local authority has been dilatory in sending out bills, never mind lax about collection. As a result of that laxity, a further financial burden is placed on the long-suffering charge payers—usually the majority of honest people.
The percentage of local spending funded from central taxation has now been increased so that only 14 per cent. is raised locally. We must have a system that avoids the trap that even the previous Labour Government recognised. Those of us who were on local authorities in those days—the 1970s—know that to be true. Today, a project may cost £100,000, and local councillors may say, "Never mind, we only have to find £14,000 and Westminster—the taxpayer—will find the other £86,000."
Capping is a necessity. It is even more essential when we are dealing with a ratio of 86 per cent. to 14 per cent. That gearing effect worries me most. If a local authority has to raise only 14 per cent. of £ 100 of spending and only spends £100, the Secretary of State's figures, which were quoted by both Front Benches, will hold water. But if that local authority spends £114, the poor charge payer must find £28. Therefore, his charge doubles. We cannot permit that because it would be an unjust reflection on a good Bill and a good scheme. We must ensure that that does not happen.
The valuation is set out in clauses 3 to 5. Although the old rating system may have been inaccurate, anomalous or difficult to understand, the valuations were precise. Until a few years ago, if someone carried out a home improvement which I believe added less than £30 to the rateable value, that was ignored. If the improvement added more than £30 to the rateable value, the home owner was penalised for spending his own money on his property and doing what many would argue was a national service by preserving the state of our housing stock.
The message from the Government seems to be that we should have banding for local taxation purposes. If my right hon. Friend the Secretary of State meant what he said when replying to my intervention when he presented his case earlier, I hope that it will be clear that there will not be precise valuations and that properties will be placed in particular bands. There must be no disincentive to the generality of home improvements, and people should not be frightened to spend their money on their own homes in case they are forced into a higher band.
It was said earlier that the value should change only when a house is sold. I hope that we do not pursue that path. If houses are valued according to broad bands, houses in a particular street that are all much of a muchness should be in the same band. It would be ridiculous if a house in that street was sold and attracted a higher tax simply because it had changed hands a few weeks before. I hope that all properties of a similar nature in a street will stay in the same band.

Mr. Tony Worthington: Sit down.

Mr. Brandon-Bravo: I will sit down when I am ready. I was told to continue until 9.15 pm
It has been said that there will be problems about appeals. Under the banding system someone would have to be convinced that the property was in the wrong band before appealing. If someone thinks that the property is broadly in the right band or somewhere near the top, he is unlikely to appeal in case the appeal body shoves the property into a higher band.
I hope that we mean what we say and that there will be rough valuations placing properties in bands and that houses will not change in value if home improvements are carried out and that they will not change in value for


taxation purposes on resale. If I can have those assurances, this will be a first-class Bill and it will pave the way to the new local tax structure which I hope will be presented to the House in this year's Queen's Speech so that it can be up and running before the next general election.

Mr. Harry Barnes: In a sense, we are discussing two Bills today—a Local Government Finance Bill and a Local Government Valuation Bill—because the Local Government Finance and Valuation Bill falls clearly into two parts. The local government finance part is an extension of the 1988 legislation that introduced the poll tax and it is in keeping with the poll tax principles. We have not begun to get rid of the poll tax. We are building upon the earlier provisions for England and Wales contained in the 1988 legislation. The valuation part sets up what the Government call the council tax. I will not spend much time considering that as there will be a general election before the Government can introduce that principle and it will bite the dust in the long run. I should like to speak to clause 1 and about my authority in north-east Derbyshire, because that authority is seriously affected by the Bill.
Much nonsense is talked about the operation of the standard spending assessment and its application in capping district authorities. District authorities are placed in a much worse position by capping than are larger authorities, because they do not have the leeway to manoeuvre with funds. My authority has a current budget of £7·3 million and would be £1·5 million or 27 per cent. over the SSA.
According to the chop logic of the Government, that council is profligate and irresponsible, but nothing could be further from the truth. All the information supplied by the Audit Commission shows that my authority is well run and efficient and that it operates according to the normal tendering provisions. For example, its direct labour force has recently obtained the refuse collection franchise. However, it is close to the bottom of almost every list of grants and SSAs per head of the population or charge payers. That applies in the context of the 26 authorities with which it was compared by the Audit Commission.
A list in answer to a parliamentary question that I asked on 5 December puts my authority at No. 346 out of 366 authorities in terms of the percentage of grant that it receives from central Government. That being the case, one would expect it to have certain characteristics that the Government would think ideal, because it would seem to need little money. However, of the 366 authorities in England, only one receives a smaller proportion of SSA per charge payer—east Dorset.
That area and north-east Derbyshire provide a stark contrast. East Dorset is represented by the hon. Member for Christchurch (Mr. Adley), who has a majority cif over 22,000, and by the hon. Member for Dorset, North (Mr. Baker) who has a majority of almost 12,000. North-east Derbyshire is represented by me with a majority of 3,700 and by my hon. Friend the Member for Bolsover (Mr. Skinner) who has a majority of 14,000. I understand that north Dorset feels considerably aggrieved about the SSA level that has been adopted for it but north-east Derbyshire's grievance is even greater.
The details of the standard spending assessment require a full debate in the House. If I had the opportunity to

speak in such a debate, I would deal with how the SSA is assessed, the different factors that are taken into account and the nonsense of the system in the context of north-east Derbyshire, which is seriously handicapped by the different methods of calculation. It is left with very little money from central Government and is now being handicapped by the total SSA level that will be provided. As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) has yet to speak, I do not have time to describe that aspect in detail.
However, I hope that the Minister will agree to meet a deputation from north-east Derbyshire, to explain the iniquities of the SSA as it applies in that area. It has become doubly dangerous. Before, we had higher poll tax levels than we would have had with a reasonable SSA. Now, we are likely to face poll tax capping and to be unable to provide essential services. Once one takes into account the statutory provisions and the parish precept, which has not been ignored in the figures, little leeway is left. Non-statutory money remains, so that expenditure of £2·5 million would have to be reduced to £1 million, which would have a devastating effect on a whole range of services. I hope that the Minister will agree to meet our deputation.

Mr. Donald Dewar: The Bill is clearly born of the chaos that was the poll tax. Over the past few months, we have witnessed the failure of every policy for which Government supporters have argued, every principle for which they have fought, and every prejudice that they have defended with the blind faith of the zealot.
We were told by Ministers—the Secretary of State for Scotland was prominent among them—that the poll tax would make it possible to abolish the sad and arbitrary use of central Government capping powers. Responsibility was to be built into the system, and the electorate would be master of the instance. All that is in the past. Accountability is no longer in fashion. It has become one of the many casualties of the Government's disordered retreat. We have seen also the abandonment of the 20 per cent. rule, although that is to live on illogically—because, if it is inappropriate or unjust in 1993 or 1994, it is equally so now.
We have seen the most unlikely people come to the Dispatch Box to defend the principle of a household tax for which only the householder is liable. I remember the abuse—I use that word advisedly—to which my right hon. and hon. Friends were subjected when they tried to defend exactly the same principle. It is extraordinary to hear the Secretary of State for the Environment and the Secretary of State for Scotland say that one of the virtues of the new council tax is that it includes in the payment net 90 per cent. of the citizens of this country—when they would have treated with contempt any such claim for the old rating system.
We have seen a display of intellectual flexibility that beggars belief, as the same right hon. and hon. Gentlemen have swallowed their pride, capital valuation, and the rate poundage system. I say this to the hon. Member for Eastwood (Mr. Stewart), who I understand is standing in for the Secretary of State. If, a few months ago, I had come to the Dispatch Box and offered him a vision of a property-based tax and a capital valuation system that


provided an individual valuation for each property and then applied a rate poundage—and suggested one or two other small changes to the rebate system, with a small concession here and there—and had asked the hon. Member for Eastwood if that would do, he would have condemned it root and branch. He would have said that it represented a return to the old rating system and as such was totally unacceptable. If the hon. Gentleman is intellectually honest, he knows that would have been his
It is amazing what party loyalty will do to principle. The hon. Member for Eastwood and most of his right hon. and hon. Friends are examples of intellectual schizophrenia. They have been compelled to make the bitter pill more palatable. As everyone knows, the cost is £4·25 billion. The Secretary of State made a remarkable reference to the Chancellor's generosity, as though he had taken out his cheque book and dashed off a quick personal promissory note for the sum of £4·25 billion—when, at the end of the day, every person in the country with purchasing power will make up that shortfall by paying more value added tax.
It is clear above all that local democracy will be the victim. The Conservative party once saw itself as the defender of local democracy. It had an honourable tradition of arguing that local communities should run their own affairs, and ought not to be bullied or overshadowed by the power of central Government. Yet members of that same party now say that it is not only right—as a temporary expedient, to get them out of an electoral difficulty—that local government should control only 13 or 14 per cent. of the revenue that it spends, but that such a concept should be enshrined in our system in a way that I think is quite indefensible.
We are promised a great future of fierce and determined capping. There will be no diversion of resources, whether it be for a child at school or for an elderly person looking for improved day care facilities, without the say-so of central Government.

Mr. Marlow: The hon. Gentleman, flushed with moral indignation, is complaining about the Government developing their policy. He belongs to a party that has said for many years that the rating system is totally wrong and should be scrapped as it is unfair and unreasonable. I understand that the Labour party is now proposing its solution to the problem—a fair rating system. What is the difference between a rating system and a fair rating system? That is the sort of thing of which Alice Through the Looking-Glass would be proud.

Mr. Dewar: If we had time, I could explain to the hon. Gentleman the difference between a fair rating system and an unfair system. He could find that difference by reading our policy and that of the Conservative party.
The Secretary of State for Scotland courteously wrote to me on 31 May about the Bill. I found it extraordinary that he said that he did not accept
that the proposals in the Bill represent a major change in the relationship between central and local government. The provisions in the Bill concerning charge capping do no more than bring my powers in this area into line with those of my colleagues south of the border.
It occurred to me that "into line" was an appropriate phrase; it has the ring of the drill square about it, which, I suspect, tells us much about the Government's approach.
I must tell the Secretary of State that this is an important change. It is only a part of what is happening, but it is an integral part of a substantial shift in power between central and local government that is not desirable and about which we protest.
Let us consider what is being proposed. The test of reasonableness in Scotland will go. Section 5 of the Local Government (Scotland) Act 1966—the Secretary of State for the Environment had clearly never heard of it—is the foundation of the present powers that lie with the Secretary of State. I have been in Scottish politics for a long time and have spent a good part of the past decade poring over amendments to that section, but it has survived and is still part of the Abolition of Domestic Rates Etc. (Scotland) Act 1987. The test, as anyone interested in local government in Scotland knows, was whether the expenditure was unreasonable and excessive. We have got rid of the test of reasonableness; it will be only whether the expenditure is excessive.
Even on that there used to be guidelines, because the Secretary of State had to take account of the
financial and other relevant circumstances of the area
of the authority. That goes as well.
That section offered little protection. People might tell me that I should not build too strong a case on it, but at least that test had to be applied and the Secretary of State had to meet that hurdle, but now it is gone. All that we are left with is that the test of excessive is what the Secretary of State says it is—what the Secretary of State decrees. That is a licence for arbitrary authority, which the House should not lightly grant.
There has been much talk about the experience of Lothian region this year. I do not want to go into the figures, but what has happened to Lothian is not an encouraging precedent for granting the powers that the Secretary of State is asking the House to grant in the Bill. As many Scottish Members will know, this year Lothian received the lowest grant per head of any regional council in Scotland. Its average expenditure is well below the average of regional councils in Scotland, but if it had received the average grant per head of regional councils in Scotland, it would have been worth more than £170 for every poll tax payer in the region. That puts in some perspective the way in which even the present powers are being used by the Secretary of State, never mind the powers that he will have when we further enfeeble the safgeguards and remove what few checks and balances statute allows.
The Secretary of State said in his letter to me that there will be no change in how grant-aided expenditure is calculated. I must accept that, as I do not believe that he would be inaccurate on that. Grant-aided expenditure is acceptable—we have all learnt to live with, if not love, the client group approach which is used to distribute the Scottish total among individual authorities, because there must be some way of distributing. It is a matter of argument, debate and dispute, but we all recognise that that machinery must exist. It is totally different if grant-aided expenditure becomes an arbitrary benchmark for penalties and a point beyond which an authority cannot spend even if it wishes to do so, if the electorate at the ballot box are willing to authorise that expenditure" and if there is a crying need in the community.
I cannot agree with the Secretary of State's view that this is not a matter of fundamental change. We are facing a difficult time in local government. On top of what we are


discussing, we have the threat of a reform of the structure which is designed to destroy, or at least to weaken. There is also a problem of morale. The Secretary of State should not underestimate that problem. It will increase greatly if the House puts on the statute book the changes embodied in the Bill.
I turn briefly, inevitably, to the valuation provisions of the Bill, which are also of great interest. It would be churlish not to say immediately that I welcome the small, but important, U-turn by the Scottish Office. The Secretary of State made it clear to the press in briefings that control of the valuation process would lie with the Inland Revenue valuation office. That is not now the case. The assessors—who have the knowledge and expertise to do the job—have been reinstated. That is right not only because they are best qualified to do that job but because they are a small group who took hard knocks during the row over the poll tax—sometimes from my side of the political divide and certainly from the system. Most of those I know well disliked the system that they had to administer, but they did their duty. When valuation was reinstated as part of local government finance, a proposal to deprive assessors of the duty of doing that work was ingratitude which was not entirely honourable. I am glad that the Secretary of State had second thoughts.
In a letter to me on 31 May, the Secretary of State said that it was important, if the council tax is to come into operation on 1 April 1993, to get the valuation process under way. Perhaps the Under-Secretary of State will say whether he is confident that the Government are on track for April 1993, whether they will make the date or whether he will hedge his bets on 1994, as the Secretary of State for the Environment appeared to do a week or two ago.
Perhaps the hon. Gentleman will comment further on the interesting provision that the assessors will be under the direction of the Inland Revenue commissioners. I understand from the Secretary of State for the Environment—I intervened on this point—that this was merely to harmonise valuation law. My impression was that it would be about the niceties of the contractors' principle and such matters. What will the relationship be?
This is an important matter. Traditionally, although an assessor is provided with the wherewithal to carry out his task by regional councils—which supply premises and budgets—he is totally independent and uses his professional judgment and discretion. It is hard enough to establish the credibility of any form of local government taxation, but it is important that the people carrying out the valuation—if it is that kind of system—are seen to be above political control and beyond reproach. The assessors have established that reputation. I regret the fact that we will not have the in-depth examination in Committee that we would normally have, as the Bill will be taken in short measure on the Floor of the House. It is important that the Under-Secretary gives a substantial definition of that relationship.
Banding is another important matter. I do not intend to spend much time on this point, but it is well known that the Labour party believes that the spread within the system is not equitable. Undoubtedly—to be fair, the Secretary of State has never hidden this fact but has paraded it—there is a measure of protection for those at the top end of the housing range, which inevitably means that those in modest properties pay more than they should. The Secretary of State said in the House on 23 April 1991 at

column 938 of Hansard that the impact of banding was "dampened" by the way in which the system has been adjusted or, as some of us would say, rigged.
If we are talking about credibility, perhaps the Secretary of State will consider the credibility of the figures that he has produced in connection with the new form of rating that he proposes to introduce. I quote from what I thought was a splendid letter of 8 May, which he was kind enough to send to me. It is a description of the valuation methods which led to the figures that were so proudly unveiled. It states:
it is important not to confuse the initial exercise to produce illustrative examples, which was essentially an in-house exercise conducted by IRVO on the basis of data which they already have for the purposes of carrying out their functions, with the much larger exercise that will be required for the actual distribution of properties in appropriate bands. I do not think that any useful purpose would be served by publishing details of the methodology of the initial exercise which was essentially statistical".
The last phrase is a magnificent piece of "Yes, Minister" speak for saying that there was no attempt to value properties at all. The whole thing was done, I suspect, by starting with a predetermined answer and working backwards to the desired result. It carries no credibility.
Briefly, I want to make the important point about the absolutely startling dishonesty of the Conservative attempt to suggest that one could run the system that they outlined without any form of regular revaluation, or perhaps without any revaluation at all. I shall react the remarkable quotation from the Minister of State, Department of Education and Science which appeared in the Municipal Journal of 24 May. He said:
Once a property has gone into a band, we think it will stay in that band virtually in perpetuity.
That is a staggering prospect and it is why I was so interested in the exchanges that I had with the hon. Member for Hornchurch (Mr. Squire) whom I respect as being something of an independent on such matters. The hon. Gentleman was naturally anxious to see the back of the poll tax and therefore anxious to endorse the system now offered to him. However, he said that we could not have what the Labour party suggested to get the system up and running quickly, which was to use the old valuation roll. It might, he said—this is an interesting concession —be possible in Scotland, where, after all, the last revaluation was carried out in 1985, but it was not possible in England, where the previous revaluation was as long ago as 1973.
However, the hon. Gentleman went on to argue how splendid it was that we would not need a revaluation, and I challenged him about this but he held to it. The trouble with his position is that, if one takes the view that one can put a property into a band in the year dot and then come back some time in perpetuity and the property will still be in that band, why not do it with the 1973 revaluation?

Mr. Squire: The hon. Gentleman will concede on reflection that there is a world of difference between a system in which all properties must be valued or for which one must use a total historic value, and a system in which one allocates properties into a series of set bands and recognises that, in general, they will move within an area in roughly the same proportion.

Mr. Dewar: I must confess that I did not understand that, but I shall read it carefully. If we assume that an honest attempt is being made to value individual


properties and to put them into a band, the nature of fluctuations in fashion, in demand and in property prices will mean that the valuation base becomes outdated. That is why we are constantly told that the whole problem of the valuation and rating system was that it required valuations periodically because the rating base became outdated. If that is the case, to suggest that we can keep property in bands in perpetuity is a striking dishonesty.
At the end of the day, we shall find that under the pressure of events and even if the scheme sees them through for a short time if they get that opportunity, the Conservatives will be driven more and more to the Labour party's views on this issue as they have already been on others during the past few months.
I believe and I fear that we shall face a bitter period of uncertainty. There is a genuine problem, which is that, in community associations, in residents' associations, and in ordinary homes, people imagine that the poll tax has already gone. The problem of collection is becoming almost insurmountable. At the end of April 1991, after a full two years of the poll tax in Scotland, the uncollected revenue was £427 million, or one quarter of the income from the poll tax during that period. In the first month of the new year, the total take in Scotland was £12 million, or £3 per head for every poll tax in Scotland. If that goes on, we face a catastrophe. Strathclyde, not because it has been capped by Lothian and for no other reason than the collapse of its income, already seeks £21 million of additional cuts at the beginning of this financial year.
Against the background of crisis, the shabby little exercise that we have been offered tonight is totally unimportant. The Secretary of State for the Environment put great emphasis on what he said was, in Scotland, the increase in expenditure of local authorities. My understanding is that the revenue expenditure during the period of this Government has gone up by 9·6 per cent. in real terms. Capital spending, excluding housing which involves a different financial system, has dropped by 8·2 per cent. I believe that I am justified in suggesting that, if one compared that with the record of the Scottish Office over the same period, one would probably find that local government came out well, even if one applied the criteria that the Conservatives want us to apply.
It is extraordinary how, under electoral pressure and concentrating on saving their electoral skins, the Government can shake out the pennies when the time comes. I will not listen to them preaching to my colleagues in local government, who face problems, about fiscal or political responsibility.
The Bill is a paving Bill: it paves the way to the wrong scheme on the wrong timetable. I do not accuse Ministers of a lack of urgency, but I accuse them—and the electorate will accuse them—of having the wrong targets and wrong-headed objectives.

The Parliamentary Under-Secretary of State for Scotland (Mr. Allan Stewart): A number of Conservative and Opposition Members, such as the hon. Member for Durham, North-West (Ms. Armstrong), the hon. Member for Eastbourne (Mr. Bellotti) and my hon. Friend the Member for Hornchurch (Mr. Squire), have rightly and properly used the occasion to make a number of purely

constituency points. All of them have been noted by my right hon. and hon. Friends, and by myself if they refer to Scotland, although I hope that the House will appreciate that, in the time available, I will concentrate on the broad principles that have underlain the debate.
My right hon. Friend the Member for Southend, West (Mr. Channon), in his excellent speech, said that the hon. Member for Dagenham (Mr. Gould) had nothing to say. That criticism was a little unfair. The hon. Member for Dagenham had a great deal to say. The problem was that it was mostly the product of a fairly vivid imagination. We heard conspiracy theory after conspiracy theory. To be helpful, I must say to the hon. Member for Dagenham that if, in the next Parliament, in opposition, he wishes to enhance his personal income, he has a considerable career as a political novelist in front of him.
The second point to make about the speech of the hon. Member for Dagenham is that he has a genial and cheerful brass neck. He talked about U-turns. I have counted the changes in Labour party policy on the issue of local government finance since 1987. I make it that it has had 67 different policy positions—a U-turn every three weeks. It has had the local income tax, the roof tax, the floor tax, a supplement on national income tax and a combination of them all.
The third point to be made about the speeches of the hon. Members for Dagenham and for Glasgow, Garscadden (Mr. Dewar)—I shall come back to the serious points made by the hon. Member for Garscadden—is that they seem to sing a different tune. My right hon. Friend the Member for Southend, West, said that he understood the position of the hon. Member for Dagenham on capping. My right hon. Friend is rather better at understanding the hon. Gentleman than I am. I am still not entirely clear about his position. As I understand it, he is against capping.
In contrast, the hon. Member for Garscadden quoted favourably several times section 5 of the Local Government (Scotland) Act 1966, which was introduced by the Labour party and created a form of rate capping. I agree that, if the hon. Member for Garscadden ever became Secretary of State for Scotland, he might wish to return to the provisions of the 1966 Act. But that is clearly incompatible with the position of the hon. Member for Dagenham.
In his excellent speech, my hon. Friend the Member for Cambridge (Mr. Rhodes James) said that the key factor was the total cost to the local taxpayer, which we have reduced significantly. My hon. Friend the Member for Teignbridge (Mr. Nicholls) rightly said that the Government have switched the burden from the local taxpayer to the central taxpayer. The position of the hon. Member for Dagenham on that is perfectly clear. I listened to him on the "Today" programme on Radio 4 on 26 March 1991. He said that Labour planned to increase the burden of council spending met locally from the current figure of about 14 per cent. to about 20 per cent. Would that apply in Scotland?

Mr. Gould: The Under-Secretary should recognise that he owes an obligation, as do his ministerial colleagues, at least to treat the figures on a common basis. If the Minister checks what the Secretary of State for the Environment told the House earlier in the week to which he refers, he will see that the Secretary of State claimed that the switch to VAT had reduced the proportion of local government


spending accounted for by local government revenue from 34 per cent. to 22 per cent. That was a clear statement. The fact that the Secretary of State, the Prime Minister and now the Under-Secretary have chosen to alter the basis of the calculation so that they judge the proportion of a different sum——

The Secretary of State for Scotland (Mr. Ian Lang): No.

Mr. Gould: Yes, that is entirely the case. If the Secretary of State does not understand that, we have a good insight into why local government finance is in such a mess.

Mr. Stewart: The hon. Member for Dagenham had a perfectly good opportunity earlier to make his own speech. My point is simple: do his figures apply to Scotland or not? We had no answer to that point from the hon. Member for Garscadden either. On issue after issue, the debate has shown that there are differences—and key differences—between the Labour party north and south of the border.

Mr. Marlow: Is not the key difference that we have found out today from the speech of the hon. Member for Dagenham (Mr. Gould) that, if there were ever the misfortune of the return of a Labour Government in this country, what they would do with local government finance would be to let it rip?

Mr. Stewart: My hon. Friend is right. A Labour Government would say to Lambeth, Liverpool arid every loony lefty council in the land, "Spend, spend and spend again." That would be their policy.

Mr. Dalyell: Will the Minister give way?

Mr. Stewart: I shall come to the question of Lothian, which was raised by the hon. Gentleman.
The point about policy which comes out of Labour party speeches made north and south of the border is that there are significant differences between the Labour party in Scotland and the Labour party in England and Wales. Frankly, it is a case of one left hand not knowing what the other left hand is doing.

Sir Nicholas Fairbairn: Whatever may happen in Lambeth or to the loony left south of the border, does my hon. Friend appreciate that the loony left north of the border, in Tayside region, has taken on more than 300 extra employees in the past three weeks?

Mr. Stewart: As always, my hon. and learned Friend makes an apt and accurate point. I hope that the community charge payers of Tayside pay full attention to his remarks.
My hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo) spoke from experience of the importance of the role of local government. He pleaded for independence for Nottingham council. That is not the subject of this debate, but I am sure that his plea has been noted by my right hon. and hon. Friends.
One of the key purposes of the Bill is to extend capping powers. Those powers were rightly praised and justified by my right hon. Friend the Member for Southend, West and my hon. Friends the Members for Torridge and Devon, West (Miss Nicholson) and for Hornchurch, who was right about revaluation. My hon. Friend the Member for Derbyshire, South (Mrs. Currie) was also right to say that the proposed powers are necessary as they are in the national interest.
I want to deal with the three major points that were made by Opposition Members, especially those representing Scotland. The hon. Member for Garscadden asked about the capping powers.

Dr. Godman: rose——

Mr. Stewart: I am sorry that I missed the hon. Gentleman's speech, and I shall give way to him.

Dr. Godman: I am extremely grateful to the Minister, who displays his characteristic courtesy by giving way. On the system of appeals north of the border, can the Minister say something about the appeal procedure vis-a-vis the assessment of valuations of domestic properties?

Mr. Stewart: That is a perfectly fair point, which was also raised by my right hon. Friend the Member for Southend, West and a number of other hon. Members.
The hon. Member for Greenock and Port Glasgow (Dr. Godman) will be aware that the consultation on our proposals is continuing. We shall consider carefully what those consulted say about appeals. However, that issue is a matter for the main Bill which we shall introduce in the autumn. I assure the hon. Gentleman that that Bill will contain the appropriate provisions to set up an appeals mechanism. If the hon. Gentleman has any particular points that he wishes to put to us on this matter, we look forward to receiving them.
The hon. Member for Garscadden asked about the capping powers in Scotland. The major purpose of the Bill is to introduce stronger capping powers as the present ones are limited. Some local authorities have completely ignored accountability. They have flagrantly ignored the interests of their charge payers this year. As a result, the charge levels set by local authorities for 1991–92 have increased, on average, by 30 per cent.
I believe that it is our duty to protect local taxpayers from the excesses of some local authorities. It is also our duty to ensure that the fundamental shift in the balance of taxation brought about by the Community Charges (General Reduction) Act 1991 has the intended effect of keeping local taxes down to a reasonable level.

Mr. Dewar: rose——

Mr. Stewart: I have already given way several times, and I hope that the hon. Gentleman will allow me to continue.
The new level of local charges made possible by the 1991 Act must be passed on to local people. The new capping powers will enable us to do just that by making local authorities exercise restraint on spending. They will protect the interests of central and local taxpayers.
In the autumn, my right hon. Friend will make a declaratory statement on procedure for capping criteria, as was done for England last year. Authorities that budget in excess of those criteria will then be subject to capping, which will constitute a much more straightforward approach to capping in Scotland.
The hon. member for Garscadden also asked about the position on valuations in Scotland. My right hon. Friend the Secretary of State made clear in his initial statement that we shall consult on how that will work most effectively in Scotland. The Scottish assessors and the Inland Revenue valuation office have been working together for about five years to achieve the harmonisation of non-domestic rating. In the case of the council tax, we


made it clear that supervision of the banding process at a national level would be the responsibility of the valuation office.
A direction-making power will be given to the valuation office under the provisions of the Bill. That will simply ensure consistency of treatment north and south of the border. I should have thought that that was a perfectly reasonable objective and it is surprising, therefore, that the hon. Member for Garscadden has criticised it. His criticisms sit oddly with the comments of the president of the Scottish Assessors Association, who described the Government's decision as sensible and said that he felt comfortable about the role of the Inland Revenue at the Great Britain level.
What are the Labour party's policies? It plans to introduce a fair rates system based not only on notional rental values but on a mixture of capital values and rebuilding, maintenance and repair costs. The hon. Member for Glasgow, Cathcart (Mr. Maxton) wants to return to the domestic rates system in Scotland. I remind him of the wise words of his right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman), who said that rates were
an irrational, inefficient, highly resented form of taxation. If a thing does not make sense—and the rating system makes no sense whatsoever—the right thing to do is to abolish it".
The Labour party wants to bring back that system.

Mr. Dalyell: rose—

Mr. Stewart: The hon. Member for Linlithgow (Mr. Dalyell) asked me about Lothian. He suggested that in all possible tests Lothian's expenditure was no greater than that of Dumfries and Galloway. I shall answer that serious question with two comparisons. The charge that was originally set by Lothian was £420. The charge originally set by Dumfries and Galloway was £242. Lothian's budget was more than 12 per cent. above its grant-aided expenditure figure, whereas the budget for Dumfries and Galloway was below the grant-aided expenditure figure. Opposition Members have alleged that Lothian's level of grant was unfair. That grant is assessed through the client group approach, which is agreed by the Convention of Scottish Local Authorities and the Scottish Office. If Opposition Members feel that the grant is unfair, why do they not ask COSLA about it, because that is not what it is saying?
The Bill lays the foundation for the orderly introduction of the council tax from 1 April 1993. The extension of our capping powers will mean that irresponsible local authorities cannot cynically exploit the run-up to the council tax and burden their charge payers with unacceptably high charges.
We are determined to ensure that the authorities do not frustrate our objective of keeping charges' down to acceptable levels by using the considerable extra sums that we are providing to fuel higher spending. Unlike Opposition Members, we have firm and realistic proposals, which today we are beginning to implement. We have acted and brought the Bill before the House. The debate has shown that the Opposition have no realistic policies. In so far as they do have policies, they are totally irresponsible. I commend the Bill to the House.

Question put, That the Bill be now read a Second time:—

The House divided: Ayes 275, Noes 200.

Division No.154]
[9.59 pm


AYES


Adley, Robert
Forth, Eric


Aitken, Jonathan
Fowler, Rt Hon Sir Norman


Alison, Rt Hon Michael
Fox, Sir Marcus


Amos, Alan
Franks, Cecil


Arbuthnot, James
Freeman, Roger


Arnold, Jacques (Gravesham)
French, Douglas


Arnold, Sir Thomas
Fry, Peter


Ashby, David
Gale, Roger


Aspinwall, Jack
Gardiner, Sir George


Atkins, Robert
Garel-Jones, Tristan


Baker, Rt Hon K. (Mole Valley)
Gill, Christopher


Baker, Nicholas (Dorset N)
Gilmour, Rt Hon Sir Ian


Baldry, Tony
Glyn, Dr Sir Alan


Banks, Robert (Harrogate)
Goodhart, Sir Philip


Batiste, Spencer
Goodlad, Alastair


Bellingham, Henry
Goodson-Wickes, Dr Charles


Bendall, Vivian
Gorst, John


Bennett, Nicholas (Pembroke)
Grant, Sir Anthony (CambsSW)


Benyon, W.
Greenway, Harry (Ealing N)


Bevan, David Gilroy
Greenway, John (Ryedale)


Biffen, Rt Hon John
Gregory, Conal


Blackburn, Dr John G.
Griffiths, Sir Eldon (Bury St E')


Blaker, Rt Hon Sir Peter
Griffiths, Peter (Portsmouth N)


Body, Sir Richard
Grist, Ian


Boscawen, Hon Robert
Ground, Patrick


Boswell, Tim
Grylls, Michael


Bottomley, Peter
Hamilton, Hon Archie (Epsom)


Bottomley, Mrs Virginia
Hamilton, Neil (Tatton)


Bowden, Gerald (Dulwich)
Hampson, Dr Keith


Bowis, John
Hanley, Jeremy


Brandon-Bravo, Martin
Hannam, John


Brazier, Julian
Hargreaves, A. (B'ham H'll Gr')


Bright, Graham
Hargreaves, Ken (Hyndburn)


Brown, Michael (Brigg &amp; Cl't's)
Harris, David


Browne, John (Winchester)
Haselhurst, Alan


Bruce, Ian (Dorset South)
Hawkins, Christopher


Budgen, Nicholas
Hayes, Jerry


Burns, Simon
Hayward, Robert


Burt, Alistair
Heathcoat-Amory, David


Butler, Chris
Hicks, Mrs Maureen (Wolv' NE)


Butterfill, John
Hicks, Robert (Cornwall SE)


Carlisle, John, (Luton N)
Higgins, Rt Hon Terence L.


Carlisle, Kenneth (Lincoln)
Hill, James


Cash, William
Hogg, Hon Douglas (Gr'th'm)


Channon, Rt Hon Paul
Holt, Richard


Chapman, Sydney
Hordern, Sir Peter


Chope, Christopher
Howard, Rt Hon Michael


Clark, Rt Hon Alan (Plymouth)
Howarth, Alan (Strat'd-on-A)


Clark, Dr Michael (Rochford)
Howarth, G. (Cannock &amp; B'wd)


Clark, Rt Hon Sir William
Howell, Rt Hon David (G'dford)


Coombs, Anthony (Wyre F'rest)
Hughes, Robert G. (Harrow W)


Coombs, Simon (Swindon)
Hunt, Rt Hon David


Cope, Rt Hon John
Hurd, Rt Hon Douglas


Cormack, Patrick
Irvine, Michael


Couchman, James
Irving, Sir Charles


Cran, James
Jack, Michael


Currie, Mrs Edwina
Janman, Tim


Curry, David
Johnson Smith, Sir Geoffrey


Davies, Q. (Stamf'd &amp; Spald'g)
Jones, Gwilym (Cardiff N)


Davis, David (Boothferry)
Jones, Robert B (Herts W)


Day, Stephen
Key, Robert


Devlin, Tim
King, Roger (B'ham N'thfield)


Dickens, Geoffrey
King, Rt Hon Tom (Bridgwater)


Dicks, Terry
Kirkhope, Timothy


Douglas-Hamilton, Lord James
Knight, Greg (Derby North)


Dover, Den
Knight, Dame Jill (Edgbaston)


Durant, Sir Anthony
Knox, David


Dykes, Hugh
Lang, Rt Hon Ian


Emery, Sir Peter
Latham, Michael


Evans, David (Welwyn Hatf'd)
Lawrence, Ivan


Evennett, David
Leigh, Edward (Gainsbor'gh)


Fairbairn, Sir Nicholas
Lennox-Boyd, Hon Mark


Fallon, Michael
Lester, Jim (Broxtowe)


Field, Barry (Isle of Wight)
Lloyd, Sir Ian (Havant)


Fookes, Dame Janet
Lloyd, Peter (Fareham)


Forman, Nigel
Lyell, Rt Hon Sir Nicholas






McCrindle, Sir Robert
Shaw, Sir Michael (Scarb')


Macfarlane, Sir Neil
Shelton, Sir William


MacGregor, Rt Hon John
Shephard, Mrs G. (Norfolk SW)


Maclean, David
Shepherd, Colin (Hereford)


McLoughlin, Patrick
Shepherd, Richard (Aldridge)


McNair-Wilson, Sir Michael
Shersby, Michael


McNair-Wilson, Sir Patrick
Skeet, Sir Trevor


Madel, David
Smith, Tim (Beaconsfield)


Major, Rt Hon John
Soames, Hon Nicholas


Malins, Humfrey
Speller, Tony


Maples, John
Spicer, Sir Jim (Dorset W)


Marlow, Tony
Squire, Robin


Marshall, John (Hendon S)
Stanbrook, Ivor


Maxwell-Hyslop, Robin
Stanley, Rt Hon Sir John


Mayhew, Rt Hon Sir Patrick
Steen, Anthony


Meyer, Sir Anthony
Stern, Michael


Miller, Sir Hal
Stevens, Lewis


Mills, Iain
Stewart, Allan (Eastwood)


Miscampbell, Norman
Stewart, Andy (Sherwood)


Mitchell, Andrew (Gedling)
Stewart, Rt Hon Ian (Herts N)


Mitchell, Sir David
Sumberg, David


Moate, Roger
Summerson, Hugo


Monro, Sir Hector
Tapsell, Sir Peter


Montgomery, Sir Fergus
Taylor, Ian (Esher)


Moore, Rt Hon John
Taylor, Teddy (S'end E)


Morrison, Rt Hon Sir Peter
Tebbit, Rt Hon Norman


Moss, Malcolm
Temple-Morris, Peter


Moynihan, Hon Colin
Thatcher, Rt Hon Margaret


Mudd, David
Thornton, Malcolm


Neale, Sir Gerrard
Thurnham, Peter


Needham, Richard
Townend, John (Bridlington)


Neubert, Sir Michael
Townsend, Cyril D. (B'heath)


Newton, Rt Hon Tony
Tracey, Richard


Nicholls, Patrick
Tredinnick, David


Nicholson, David (Taunton)
Trippier, David


Nicholson, Emma (Devon West)
Twinn, Dr Ian


Norris, Steve
Vaughan, Sir Gerard


Onslow, Rt Hon Cranley
Viggers, Peter


Page, Richard
Wakeham, Rt Hon John


Paice, James
Waldegrave, Rt Hon William


Parkinson, Rt Hon Cecil
Walden, George


Patnick, Irvine
Walker, Bill (T'side North)


Patten, Rt Hon John
Waller, Gary


Pattie, Rt Hon Sir Geoffrey
Walters, Sir Dennis


Peacock, Mrs Elizabeth
Wardle, Charles (Bexhill)


Porter, Barry (Wirral S)
Watts, John


Porter, David (Waveney)
Wells, Bowen


Portillo, Michael
Wheeler, Sir John


Powell, William (Corby)
Whitney, Ray


Price, Sir David
Widdecombe, Ann


Redwood, John
Wiggin, Jerry


Rhodes James, Robert
Wilkinson, John


Riddick, Graham
Wilshire, David


Rifkind, Rt Hon Malcolm
Winterton, Mrs Ann


Roberts, Sir Wyn (Conwy)
Wolfson, Mark


Rossi, Sir Hugh
Wood, Timothy


Rost, Peter
Woodcock, Dr. Mike


Rumbold, Rt Hon Mrs Angela
Yeo, Tim


Ryder, Rt Hon Richard
Young, Sir George (Acton)


Sackville, Hon Tom



Sainsbury, Hon Tim
Tellers for the Ayes:


Sayeed, Jonathan
Mr. David Lightbown and


Shaw, David (Dover)
Mr. John M. Taylor.


Shaw, Sir Giles (Pudsey)



NOES


Abbott, Ms Diane
Battle, John


Adams, Mrs Irene (Paisley, N.)
Beckett, Margaret


Allen, Graham
Bellotti, David


Alton, David
Benn, Rt Hon Tony


Anderson, Donald
Bennett, A. F. (D'nt'n &amp; R'dish)


Archer, Rt Hon Peter
Benton, Joseph


Armstrong, Hilary
Bermingham, Gerald


Ashdown, Rt Hon Paddy
Blair, Tony


Ashley, Rt Hon Jack
Blunkett, David


Ashton, Joe
Boateng, Paul


Banks, Tony (Newham NW)
Boyes, Roland


Barnes, Harry (Derbyshire NE)
Bradley, Keith


Barnes, Mrs Rosie (Greenwich)
Bray, Dr Jeremy


Barron, Kevin
Brown, Gordon (D'mline E)





Brown, Nicholas (Newcastle E)
Jones, leuan (Ynys Môn)


Buckley, George J.
Kaufman, Rt Hon Gerald


Caborn, Richard
Kennedy, Charles


Callaghan, Jim
Kirkwood, Archy


Campbell, Menzies (Fife NE)
Lamond, James


Campbell, Ron (Blyth Valley)
Leadbitter, Ted


Campbell-Savours, D. N.
Leighton, Ron


Canavan, Dennis
Lewis, Terry


Clark, Dr David (S Shields)
Livingstone, Ken


Clelland, David
Lloyd, Tony (Stratford)


Clwyd, Mrs Ann
Lofthouse, Geoffrey


Cohen, Harry
Loyden, Eddie


Cook, Robin (Livingston)
McAllion, John


Corbett, Robin
McAvoy, Thomas


Corbyn, Jeremy
McKelvey, William


Cousins, Jim
McLeish, Henry


Crowther, Stan
McMaster, Gordon


Cryer, Bob
McNamara, Kevin


Cummings, John
Madden, Max


Cunliffe, Lawrence
Marshall, David (Shettleston)


Dalyell, Tam
Marshall, Jim (Leicester S)


Darling, Alistair
Martin, Michael J. (Springburn)


' Davies, Rt Hon Denzil (Llanelli)
Martlew, Eric


Davies, Ron (Caerphilly)
Maxton, John


Davis, Terry (B'ham Hodge H'I)
Meacher, Michael


Dewar, Donald
Meale, Alan


Dixon, Don
Michael, Alun


Dobson, Frank
Michie, Bill (Sheffield Heeley)


Doran, Frank
Michie, Mrs Ray (Arg'l &amp; Bute)


Douglas, Dick
Mitchell, Austin (G't Grimsby)


Duffy, A. E. P.
Morgan, Rhodri


Dunnachie, Jimmy
Morley, Elliot


Dunwoody, Hon Mrs Gwyneth
Morris, Rt Hon A. (W'shawe)


Eadie, Alexander
Morris, Rt Hon J. (Aberavon)


Eastham, Ken
Mullin, Chris


Edwards, Huw
Murphy, Paul


Evans, John (St Helens N)
Oakes, Rt Hon Gordon


Ewing, Harry (Falkirk E)
O'Brien, William


Ewing, Mrs Margaret (Moray)
O'Hara, Edward


Fatchett, Derek
O'Neill, Martin


Faulds, Andrew
Orme, Rt Hon Stanley


Fearn, Ronald
Patchett, Terry


Field, Frank (Birkenhead)
Pendry, Tom


Fisher, Mark
Pike, Peter L.


Flannery, Martin
Prescott, John


Flynn, Paul
Primarolo, Dawn


Foot, Rt Hon Michael
Quin, Ms Joyce


Foster, Derek
Radice, Giles


Foulkes, George
Randall, Stuart


Fraser, John
Rees, Rt Hon Merlyn


Fyfe, Maria
Reid, Dr John


Galloway, George
Richardson, Jo


Garrett, John (Norwich South)
Robinson, Geoffrey


Gilbert, Rt Hon Dr John
Rogers, Allan


Godman, Dr Norman A.
Rooker, Jeff


Golding, Mrs Llin
Rooney, Terence


Gordon, Mildred
Ross, Ernie (Dundee W)


Gould, Bryan
Rowlands, Ted


Grant, Bernie (Tottenham)
Ruddock, Joan


Griffiths, Nigel (Edinburgh S)
Salmond, Alex


Griffiths, Win (Bridgend)
Sedgemore, Brian


Grocott, Bruce
Sheldon, Rt Hon Robert


Hain, Peter
Shore, Rt Hon Peter


Harman, Ms Harriet
Short, Clare


Hattersley, Rt Hon Roy
Sillars, Jim


Heal, Mrs Sylvia
Skinner, Dennis


Healey, Rt Hon Denis
Smith, Andrew (Oxford E)


Hoey, Ms Kate (Vauxhall)
Smith, C. (Isl'ton &amp; F'bury)


Hogg, N. (C'nauld &amp; Kilsyth)
Smith, J. P. (Vale of Glam)


Hood, Jimmy
Snape, Peter


Howarth, George (Knowsley N)
Soley, Clive


Howells, Dr. Kim (Pontypridd)
Spearing, Nigel


Hoyle, Doug
Steel, Rt Hon Sir David


Hughes, John (Coventry NE)
Steinberg, Gerry


Hughes, Robert (Aberdeen N)
Strang, Gavin


Hughes, Simon (Southwark)
Taylor, Mrs Ann (Dewsbury)


Illsley, Eric
Thomas, Dr Dafydd Elis


Ingram, Adam
Turner, Dennis


Janner, Greville
Vaz, Keith


Jones, Barry (Alyn &amp; Deeside)
Walley, Joan






Wardell, Gareth (Gower)
Wilson, Brian


Wareing, Robert N.
Winnick, David


Watson, Mike (Glasgow, C)
Worthington, Tony


Welsh, Andrew (Angus E)
Wray, Jimmy


Welsh, Michael (Doncaster N)



Wigley, Dafydd
Tellers for the Noes:


Williams, Rt Hon Alan
Mr. Frank Haynes and


Williams, Alan W. (Carm'then)
Mr. Allen McKay.

Question accordingly agreed to.

Bill read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Patrick.]

Committee tomorrow.

Local Government Finance and Valuation Bill [Money]

Queen's recommendation having been signified—

Motion made, and Question proposed,
That, for the purposes of any Act resulting from the Local Government Finance and Valuation Bill, it is expedient to authorise the payment out of money provided by Parliament of such sums as may be required to enable a valuation to be carried out, in accordance with the provisions of the Act, of all domestic properties in Great Britain, including sums required—

(a) to enable the Secretary of State to make grants to regional or islands councils towards their expenditure for the purposes of, or otherwise in connection with, the valuation; and
(b) to meet administrative expenses incurred by the Secretary of State in making any such grants.—[Mr. Portalo.]

Mr. David Blunkett: I will not detain the House long, because I do not believe that we should sit after 10 pm on any evening; but I cannot let the money resolution go by without commenting on the fact that we are about to embark on expenditure in excess of £250 million. The Government often chide the Labour party on the ground that, whenever there is a problem, it throws money at it; yet every time the Government introduce proposals on local government finance, it costs the rest of us a great deal. [Interruption.]

Mr. Speaker: Order. Will hon. Members below the Bar kindly leave the Chamber quietly or come and join us, please?

Mr. Blunkett: The sum of £250 million would seem very large were it not for the fact that, as the Chief Secretary to the Treasury revealed on 21 January, excluding non-collection costs, the community charge—or poll tax—cost us a staggering £6·1 billion in increased expenditure from central Government in the years 1989 to 1991 inclusive. I suppose that £250 million looks positively slim against that.
However, we are not clear about the final sum that will be required to undertake the revaluation. As was revealed today during Second Reading of the Bill, we are not clear on what basis the valuation will take place. We are not sure whether it will be based on capital values or on capital values plus. We are not even sure whether it will be a sampling valuation to place properties in bands, or whether there will be a comprehensive valuation of individual properties.
The money resolution refers to the valuation of individual properties. It refers to
all domestic properties in Great Britain".
To anyone who knows anything about the valuation system, that implies that each individual property will be individually assessed. However, every other Government statement, and clause 3 of the Bill, suggest that there will be sample valuing assisted by estate agents, who have a vested interest in increasing the price of property, from which they get a cut.
Had the Government chosen tonight to accept our solutions, the amount necessary to allocate to the valuation process would have been less. It could have been done using existing valuation staff over a rational period. it could have been done while we returned to the rating system, with the valuations from 1973 in England and


Wales and from 1985 in Scotland. That would have meant implementing the alternative from 1 April next year, and would have given a breathing space for the valuation process to be carried out sensibly. It would have allowed genuine consultations to take place, rather than our introducing Bills before the consultation period was over.
We could then have saved £3 billion over the next two years in under-collected tax, administrative costs and in the collection process for the poll tax. In other words, that £3 billion could have defended and protected services; it could have bought teacher time, home helps and nursery places. The Government are going to squander that money in addition to the £250 million to which the money resolution relates.
The money resolution throws bad money after bad money. I wish that we could get that message across in the media, but the media are interested in only one issue at a time. I received a letter from the director-general of the BBC, who explained that he could not cover one poll tax issue because his television crews were covering a health service issue at the time. The BBC has been brought to such penury by the Government that it can manage to cover only one major event a day.
We should make the media interested in the expenditure of sums like £250 million and why we are wasting £3 billion over the next two years by staggering on with the poll tax into 1994 instead of getting rid of it by April next year. Perhaps we could make people in the media interested in that by making them aware of what the banding system and the valuation process will mean for their properties. They should become aware that estate agents will push up the prices of their houses to ensure that they are in a higher band and pay more than would otherwise be necessary. If we could do all that, it would be possible to debate the money resolution seriously.
The Opposition know that it will cost a great deal of money to carry out the valuation. We wish that it could be carried out sensibly and rationally over a reasonable period. We also wish that we were getting rid of the poll tax by 1 April, but the Government will pay the price when the general election eventually comes.

Mr. Bob Cryer: I want to raise a few points in respect of the financial effects of the Local Government Finance and Valuation Bill. The Bill's explanatory and financial memorandum states blandly, under the heading "Financial effects of the Bill":
The charge capping provisions of the Bill have no significant effects on central government expenditure.
Of course they do not. The Bill demonstrates the Government's centralisation of power. They are issuing an order or decree to local authorities which, for 100 years or more, have exercised their own tax-gathering powers without the interference or involvement of central Government, by virtue of the democratic accountability of local authorities to their local electorate. Issuing a centralised jackbooted decree in the way in which the Government are exercising the charge-capping powers does not cost much more than the price of a postage stamp. However, the cost to local residents in terms of cuts in education, services for the mentally handicapped, social services and a whole range of local government services will be savage.
I want to consider the £250 million that the Government are throwing at the problem. We should have

some information about how that money will be spent because that is the purpose of a money resolution. The provisional estimate is £250 million. Clause 3 provides powers for the Secretary of State to make regulations and establish the principles by which the valuation will be conducted.
The Government are clearly unprepared for this legislation. They are demanding in primary legislation that the principles that will apply should be included in subordinate legislation because they are not ready to be placed in primary legislation. It really is a topsy-turvey world when the Government introduce primary legislation and then say that the principles that they have not yet grasped or grappled with will be contained in subordinate legislation to be presented at some future date. Surely they have some notion of how that will be carried out.
Page 2 of the Bill shows that the number of public sector posts required to carry out the valuation is not known, because the Government are not certain how much of the valuation work will be contracted out to private sector professionals.
The Government say that the principles of their legislation have yet to be presented, and they tell the House that the amount to be spent is £250 million, but they do not know how much will be spent in the private sector and how much will be retained in the public sector. Will expenditure in the private sector be of the open cheque book variety for the chums of the Tory Government, or will expenditure be within the £250 million set out in the money resolution?
It is not unknown for the Government, having got a money resolution through the House, to have to come back two or three times after discovering that they do not have the authority for the expenditure. That is because they have treated the House with their usual arrogant contempt and have put through a money resolution which does not cover the whole of the expenditure. I invite the Minister to make it clear that the provisional estimate of £250 million will be adhered to and that the Government will not hand huge sums to the private sector.
As my hon. Friend the Member for Sheffield, Brightside (Mr. Blunkett) said, estate agents will have a vested interest in raising the amount of work that they do and the value that they place on houses. How will they maintain objectivity? Will payments to them be strictly compared with the rates for civil servants, or will they work on commission? Such issues are implied by the money resolution, and the House needs some answers.
Because of the dithering and confusion surrounding this legislation, the Government will soon have to come back to the House to ask for further authority for expenditure. I hope that that will not happen. The Opposition are protecting taxpayers against this lavish, spendthrift Government, who have already hurled £6 billion at this horrendously absurd poll tax in a vain attempt to rescue it.
The Government are asking for what they regard as a trivial amount, but £250 million is a very important item of expenditure. If it were applied to Bradford, it could solve some of its education problems. [Laughter.] Conservative Members laugh. There are 600 temporary classrooms in Bradford and about £40 million is needed to replace them with permanent extensions which are needed to cater for Bradford's expanding school rolls. No new houses are being built in Bradford, and there is a waiting list of several thousand. We need such money to put Bradford on an even keel, but in the past 10 years


hundreds of millions of pounds have been drawn away from local authorities, including Bradford, by the Government.
It is outrageous and unjust of the Government to take Government grant from local authorities, introduce wider charge-capping measures and then produce £250 million for an airy-fairy scheme whose principles the Government know nothing about.

Mr. Frank Haynes: I agree with everything that my hon. Friend says. He queried whether the Government would return to ask for more money. They always do. That has happened regularly over the years, when they have been looking for a bit of additional cash: they sneak it through in the early hours of the morning. It is people like my hon. Friend and myself, who are regular attenders, who have to put up with that kind of thing. When the Tories come to that Dispatch Box, they are really saying, "We've come for a bit more money for our friends."

Mr. Cryer: rose—

Mr. Deputy Speaker (Sir Paul Dean): Order. Before the hon. Gentleman responds, I ask him to bear in mind the fact that the money resolution deals with the valuation of domestic properties, and that he should confine his remarks to that subject.

Mr. Cryer: Absolutely, Mr. Deputy Speaker. I would not dream of straying outside that subject. In fact, I have had quite a bit of practice at speaking on money resolutions. I find myself able to stay within the bounds of Standing Orders while at the same time pointing emphatically at the way in which the huge sum of money that is to be spent on valuation could be used for better purposes than to help the Government out of the financial mess in which they have got themselves over the poll tax.
I remember that on one occasion, the then Home Office Minister, the hon. and learned Member for Grantham (Mr. Hogg), was forced to return to the Dispatch Box two further times because the Government had made such a mess of their money resolutions.

The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hogg): You have made your point.

Mr. Cryer: And it is not the only point I have scored against the Government. That is not difficult to do, given the mess into which they have got themselves in a large number of areas.
I hope that the Minister has some answers, and that he will not be coming back to the House. I want to restrict public expenditure on this kind of escapade. The valuations will create all kinds of problems, with the system of appeal and the move from one band to another. The notion that properties will remain in certain bands in perpetuity is quite ludicrous—as one Environment Minister has already suggested. We will need a much more complex system to meet all the problems that will arise.
A better solution would be to end the poll tax and to replace it with Labour's proposals. We have already told the Government that we will co-operate in the introduction of a fairer tax. Then public money can be

spent in the areas in which it should be spent—education, housing, and social services—rather than on propping up a tottering edifice.

The Minister for Local Government and Inner Cities (Mr. Michael Portillo): It was most amusing to hear the hon. Member for Bradford, South (Mr. Cryer) try to pose as some kind of friend of the taxpayer—a defender of the citizen. The Second Reading that preceded this debate was remarkable for the clarity with which Labour expressed its refusal to contemplate any capping or to defend the local taxpayer, and its determination, should it ever return to office, to let local authority spending rip.
It was remarkable also to hear the hon. Member for Dagenham (Mr. Gould) claim that the Government's council tax will in some way lead to higher bills per household than Labour's scheme, which the Opposition somewhat amusingly call "fair rates". Labour's figures are based on local authority spending this year—which has been brought extremely close to the Government's £39 billion target because we have been willing to cap, and have capped, and because the threat of capping persuaded many local authorities to adjust their budgets. It will not wash for the hon. Member for Dagenham, or for other members of the Opposition Front Bench, to claim to be the taxpayer's friend. They have spent much of the afternoon proving that they are not.

Mr. Haynes: On a point of order, Mr. Deputy Speaker. You pulled me up because I did not mention the question of valuation, but neither has the Minister. It would be fair if you pulled him up now.

Mr. Deputy Speaker: I am grateful for the hon. Gentleman's assistance. I was becoming slightly worried when the Minister was talking about capping.

Mr. Portillo: I am sensitive enough to have been able to feel some of the vibes that were emanating from the Chair.
The hon. Member for Bradford, South said that the explanatory memorandum stated that the capital provisions have no significant effect on expenditure and spoke of the cost to local taxpayers. They are not costs but savings to local taxpayers. Derwentside, despite its small budget, has been levying a community charge £95 per head higher than the Government believe to be appropriate.
The hon. Member for Sheffield, Brightside (Mr. Blunkett) castigated the Government for what he saw as an expensive and spendthrift proposal. I was surprised by his remarks. I remind the House that, in contrast to the £250 million proposed to allocate single properties to bands—the provisional estimate made in the explanatory memorandum, on which the money resolution is based—the Labour party proposes a return, in the short term, to the old rating list, a second change of system within 12 months and, following that, a valuation carried out not on a banding basis but on an exact valuation of all properties, which should be based on four different methods of valuation—rental, capital, rebuilding costs and repair and maintenance costs.
In addition, Labour proposes a new element to take into account ability to pay. In contrast to the £250 million that the money resolution proposes for a most simple valuation by allocating all properties to bands, the Labour party seeks to have two changes of system within a short period, and a valuation based on four different factors.

Mr. Blunkett: Perhaps the Minister would clarify the difference between clause 3 and the money resolution, the stated purpose of which is to provide the money for the valuation of all domestic properties.

Mr. Portillo: That was my next point. I am surprised that the hon. Gentleman is puzzled. All domestic properties in Britain must be allocated to a band. Therefore, they are being assigned a value—not an exact value, as the Labour party proposes, which would be an expensive process, as it would require a valuer to look at the details of every property—which will enable many properties to be valued without exact inspection.

Mr. Cryer: Whole streets?

Mr. Portillo: As the hon. Member for Bradford, South is saying, it may be possible to consider whole streets at a time and say that it is clear that all the properties in the street share certain characteristics. For that reason, the cost of valuation can be kept as reasonable as our provisional estimate of £250 million.

Mr. Cryer: The valuations may be made streets at a time, but surely the Minister is aware of the differences between houses in streets and roads. Corner houses are different and often have larger gardens, so does he not think that the Government's proposals will give rise to many problems? For example, an appeal system would be necessary so that people do not resent their houses being put in the same band, whatever the differences between them. This will create enormous problems.

Mr. Portillo: I am well aware that, within streets, there can be houses of different character. I am proposing only that a valuer might choose that approach where he is aware that all the houses in the street were basically of the same sort. I am not sure why the Labour party is being so obtuse about a banding system. I should have thought that it was an obvious way of proceeding which would commend itself to the Labour party, particularly as the Labour party now claims some interest in value for money.
The Government are interested in using the private sector to help in the valuation exercise because we believe that the private sector may be able to offer us value for money. Because that is the basis on which we would use the private sector, I am not able to say what proportion of the money will be spent with the private sector arid what proportion will need to be spent with the public sector. I should want to use the private sector where it offers value for money. If I were to prejudge matters now, I should not be able to argue convincingly to the House that I was obtaining value for money.
The hon. Member for Brightside talked about the possible loss of revenue on the community charge over the next two years of its existence. Two points make me believe that the way ahead will be better than recent experience—the enforcement procedures are up and running and local authorities are being urged to pursue non-payers to the limit of their considerable powers, and the community charge has been reduced by £140, which means that, even

in high-spending Labour authorities, it is now possible for many more people to pay the community charge without difficulty.
If the hon. Member for Brightside is really concerned about the workability of the community charge over the next two years, it still lies in his hands and in the hands of his hon. Friends on the Opposition Front Bench to say unequivocally that they expect everyone to pay the community charge, including Labour Members of Parliament and Labour councillors. Until that is said loudly and clearly, the House will have little sympathy.

Mr. Allen McKay: Will the hon. Gentleman give way?

Mr. Portillo: The hon. Gentleman may make the statement again. Once he has made it, he can also explain why, despite that, there are still Labour Members and Labour councillors who advocate non-payment.

Mr. Blunkett: I shall deliberately and calculatingly rise to the bait. So that we do not have to go through all this in the Committee of the whole House, may I say unequivocally that we have made it clear on innumerable occasions to every Labour party member and elected representative that we expect them to pay the poll tax. We have made that clear in our resolutions and in our conference statements.
We do not yet, however, live in a totalitarian society—[Interruption.] We in the Labour party do not, which is why I do not have the power—nor should anyone else—to compel individuals to do something. The Government should not have the power; nor should I. We should have the ability to persuade and encourage, and to ensure that people understand our policies. I hope that the Minister accepts that that is a clear statement of what we stand for and where we are at. If we could say the same for Conservative Members and their friends about the manipulation of methods of ensuring that everything that should be paid was paid, we would all be much better off. Last year, the National Audit Office showed that £5 billion of national taxation was going missing. It is time that the Government did something about that.

Mr. Portillo: When I next have the pleasure of meeting Joan Twelves, I shall discuss the Labour party's lack of totalitarianism—[Interruption.] She has also been thrown out of the Labour party.
I am happy to commend the money resolution to the House.

Question put and agreed to.

Resolved,
That, for the purposes of any Act resulting from the Local Government Finance and Valuation Bill, it is expedient to authorise the payment out of money provided by Parliament of such sums as may be required to enable a valuation to be carried out, in accordance with the provisions of the Act, of all domestic properties in Great Britain, including sums required—

(a) to enable the Secretary of State to make grants to regional or islands councils towards their expenditure for the purposes of, or otherwise in connection with, the valuation; and
(b) to meet administrative expenses incurred by the Secretary of State in making any such grants.

European Community Documents

Mr. Tony Marlow: On a point of order, Mr. Deputy Speaker. Before deciding on the European Community document on tobacco products, I seek your advice.
One of the great constitutional problems with which we are faced is the acquisition of powers by stealth by European Community institutions. The House, in agreeing to the Single European Act 1985, agreed on the establishment and functioning of the internal market of the European Community. Powers were given to the European Community to decide various issues by a qualified majority. The document that we are about to decide deals with the internal market with reference to the labelling of tobacco products. It is sensible to argue that, if a tobacco product can move from one part of the internal market to another, the labelling should be the same throughout. We have given such powers to the European Community by a qualified majority vote.

Mr. Deputy Speaker (Sir Paul Dean): Order. I am sorry to interrupt the hon. Gentleman, but we cannot debate the matter now. I am not clear what point of order there is for the Chair.

Mr. Marlow: I have no desire or intention to debate the issue now. I am saying that certain powers have been given with regard to the labelling of tobacco products. The document also contains a power to ban a certain product—oral snuff. Another document, by a qualified majority vote, could ban the sale of alcohol. This is nothing to do with trade between countries in the Community or with the internal market; it is to do with stopping the people of this country doing something in this country. The House has not given such powers to the European Community.
The Government's view is that, if the matter were taken to the European Court, the issue might be defeated. We know that the European Court is a political court. The Government have decided not to pursue the issue, but the

powers of the House are being removed from the House. It is no good voting against a take-note motion. I ask for your advice, Mr. Deputy Speaker, about what the House can do to retrieve its original powers which it never intended to give to the European Community institutions but which are now daily being acquired by stealth.

Mr. Deputy Speaker: It is not possible to pursue the matter now. As I am sure that the hon. Gentleman realises, I am bound by Standing Order No. 102(9) to put the Question forthwith.

Motion made, and Question put forthwith, pursuant to Standing Order No. 102(9) (European Standing Committees),

LABELLING OF TOBACCO PRODUCtS

That this House takes note of European Community Document No. 10146/90 and the Supplementary Explanatory Memorandum submitted by the Department of Health on 8th May 1991, relating to labelling of tobacco products; recognises that the proposal would require the United Kingdom to extend legislative controls on tobacco products' labelling and to ban oral snuff products, endorses the Government's view that it is important to prevent the use of oral snuff from becoming established in the United Kingdom and the European Community and that it is desirable that the users of all tobacco products should be warned about the health risks; and supports the Government's view that the proposal is acceptable to the United Kingdom.—[Mr. Nicholas Baker.]

Question agreed to.

Motion made, and Question put forthwith, pursuant to Standing Order No. 102(9) (European Standing Committees),

PROTECTION OF HABITATS OF WILD FLORA AND FAUNA

That this House takes note of European Community Documents Nos. 8149/88, 9204/89, 5807/90 and 4684/91 and the Supplementary Explanatory Memorandum submitted by the Department of the Environment on 10th May 1991, on the protection of habitats and wild flora and fauna; and supports the Government's intention to press urgently for an approach which would provide satisfactory protection throughout the Community for species and habitats which are endangered or vulnerable at the European level—[Mr. Nicholas Baker.]

Question agreed to.

Guardsmen Povey, Hicks and Ray (Compensation)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Nicholas Baker.]

Mr. David Winnick: I wish tonight to raise the case of a constituent of mine, Sean Povey, who, with two other Grenadier guardsmen, lost his legs during a training exercise in Canada. The tragic accident happened on 7 July 1989 while the soldiers were digging a trench as part of a training exercise. A buried shell exploded and all three—Sean Povey, Adrian Hicks and John Ray—had to have their legs amputated. They also suffered other injuries.
That is the background to the debate that I have initiated tonight. My constituent, Sean Povey, was only 19 at the time, and the others were also young. I understand that one of them—not my constituent—has already been discharged from the Army. All three received lengthy hospital treatment, and Sean remains in a military hospital for most of the time. In all, he has undergone five operations and he may have to undergo another in the near future. At 19, this young lad lost his legs while carrying out instructions in a training exercise. Clearly—and I hope that the Minister will confirm this—no blame can be attached to him or to the other two.

The Minister of State for the Armed Forces (Mr. Archie Hamilton): indicated assent.

Mr. Winnick: I see the Minister nodding. They are entirely innocent of what occurred in the training exercise in Canada in July 1989.
The debate arises because of the Ministry of Defence's continuing refusal to pay compensation to the three soldiers. That refusal is on the basis that what occurred was not the fault of the Ministry. The Minister has confirmed—and he will no doubt do so again later—that no blame attaches to the three soldiers. However, it has also been said that no blame attaches to the Ministry. There is therefore to be no compensation.
However, the soldiers and their families were initially told, after the accident, that compensation would be paid. I was told in a reply that I received from the Under-Secretary of State for the Armed Forces in the other place that, having received the advice of the Treasury Solicitor and counsel that the Ministry was not legally responsible for the injuries, it was decided not to pay any compensation. It seems that the Ministry is hiding behind a legal briefing. It has been told that it has no legal responsibility, and Ministers have decided simply to accept that decision. I find that totally unsatisfactory, as do many other Conservative and Opposition Members. More than 200 hon. Members have signed an early-day motion tabled by the hon. Member for Winchester (Mr. Browne) which calls for the Government to pay generous compensation and calls for the return of the accumulated legal costs to the three guardsmen.
The regiment has done its best, but the decision lies with the Ministry which, so far, has refused to relent in the case. Representations by solicitors have been made on behalf of the three soldiers. Hon. Members, including myself, have written, but the response has been totally negative in terms of compensation. There has been no willingness by the

Ministry for the board of inquiry into the case to be reopened. I believe that there is a case for that to be done, and I shall be interested to hear the Minister's response.
The Minister will no doubt refer tonight to the fact that, if my constituent, Sean Povey, is duly discharged from the Army, a service pension will be paid to him. That is right. But a pension cannot be a substitute for extra compensation after losing both legs at the age of 19, when no fault lies with him or with the other two soldiers.
I do not know whether the Minister is aware that the Member of Parliament of one of the soldiers, the Under-Secretary of State for Defence Procurement, is sitting beside him. The hon. Member for Bristol, East (Mr. Sayeed) has asked me whether he can intervene, and I hope that he will be able to do so shortly. They know, as I do, that all three men are bitterly disappointed by the attitude of the Ministry of Defence. Who can blame them?
It will not be easy for the three men in civilian life. The only job that they have known has been the Army. They joined the Army straight after school. Although without legs and crippled for life, they will seek work in a highly competitive marketplace. Even if we were not in such a serious recession, they would be up against competition from others who may have learnt a trade after leaving school. All the experience of the three men has been in the Army. Have they not suffered enough already without being put through additional mental stress and difficulties if the case has to go to court?
I received a letter from a teacher at a school in my constituency, part of which I should like to quote. The teacher writes:
I have known Sean for a number of years in my capacity as a subject teacher and Head of Sixth Form at St. Thomas More School in Willenhall.
For several years Sean had made it plain that the only career he wished to follow was in the army. When he was accepted for training"—
I hope that the Minister is listening—
Sean was absolutely delighted and I remember how proud he was when he visited the school in his uniform after passing out.
It seems a great tragedy to me when a young man whose only desire in life was to defend his country is now being so shabbily treated by the Ministry of Defence.
I do not expect that the Minister will relent tonight. The Minister has his brief—I do not wish to personalise the point—and he will explain, unfortunately, that the Ministry has not changed its view. He will be full of sympathy. Indeed, the letter that I received was full of sympathy for the three young men, and I do not question that. He will refer to the pension that will be paid through the Department of Social Security if the soldiers are discharged, as I am sure that the other two soldiers will be, because of their serious injuries.
This case will not go away. This Adjournment debate is part of a continuing campaign for justice to be done to the three soldiers. I was told in the reply that I received from the Minstry of Defence that it did not intend that my constituent or the other two soldiers would be abandoned. But Sean Povey, Adrian Hicks and John Ray feel, to a large extent, that they have been abandoned by the Ministry of Defence. I know that the Royal British Legion has written to several hon. Members urging them to support the campaign for compensation to be paid.

Mr. John Browne: Will the hon. Gentleman give way?

Mr. Winnick: If I can conclude, the hon. Gentleman may have time to make his remarks.
A construction worker who lost both legs in the channel tunnel work, also in July 1989, took his case to court and was awarded in the High Court £370,173 agreed damages. That accident took place in the same month and the same year. That person, who was aged 40, also lost both legs. I ask the Minister and the Secretary of State to realise how essential it is that the three soldiers, who lost their legs through no fault of their own and have been crippled for life, should receive justice. If sufficient hon. Members on both sides of the House are determined that justice should be done, in the end it will be done; but I hope that it will be done in the very near future.

Several Hon. Members: rose—

Mr. Deputy Speaker (Sir Paul Dean): Order. Do I understand that the hon. Members who are rising have the agreement of both the hon. Member for Walsall, North (Mr. Winnick) and the Minister? I see that they have.

Mr. Jonathan Sayeed: I am grateful to the hon. Member for Walsall, North (Mr. Winnick) and to the Minister of State for the Armed Forces, my hon. Friend the Member for Epsom and Ewell (Mr. Hamilton), for allowing me to speak in the debate. I congratulate the hon. Member for Walsall, North on initiating it. As they both know, Lance Corporal John Ray is one of my constituents. This poor young man had both his legs blown off in the accident in Canada.
What makes me particularly angry about what happened is that I believe that John Ray, Guardsman Hicks and Guardsman Povey are being impeded in their search for justice by what I can only call secrecy within the Ministry of Defence. I understand, as any sensible person understands, that there is a necessity in the MOD for keeping most things, or at least many things, secret. But there are certain matters into which secrecy should not intrude. In certain matters, honesty, common sense and compassion should rule the day. This matter is undoubtedly one of them.
In these few moments, I seek certain undertakings. The first is that the full memorandum of understanding between the Canadian and United Kingdom Governments and any amendments that have been made since 1979 are released to the legal representatives of the three guardsmen. Secondly, the full board of inquiry report should be released, possibly without restricted details such as the composition and technical details of a 76 mm Hesch round. Thirdly, the range orders that existed in 1984–85 when the blind was supposedly fired, plus the range orders in existence on 7 July 1989 when the three young men were so severely injured, should be given to the legal representatives who have a duty and a right properly to represent our constituents.
I ask my hon. Friend the Minister to answer some questions. First, were the young men properly warned of the dangers of buried unexploded munitions? If not, why not? If they were, what precautions were taken, and why did they not work? Does it make any difference to the legal case whether the 76 mm Hesch blind was fired from a Canadian gun or a British one?
There is no doubt about the fact that the careers and lives of those three young men have been blighted. In

industrial accidents of a similar nature, prompt and effective compensation is paid. We know that military training is often hazardous, and undertandably so, but while maintaining the efficacy of military training it is also the duty of those in authority to ensure that they reduce such hazards to the minimum. When that duty fails, there is also a duty on those in authority to look after those who are, unhappily, so damagingly injured.
I am by no means satisfied that the Ministry of Defence is doing its duty by those who decided to serve us by doing theirs.

11 pm

Mr. John Browne: I thank the hon. Member for Walsall, North (Mr. Winnick) for giving me the opportunity to speak. I also congratulate the hon. Gentleman on winning the ballot and instigating this important debate.
My hon. Friend the Member for Bristol, East (Mr. Sayeed) asked several questions to which I shall be very interested to hear the answers. I believe that it will be difficult for the Minister to answer those questions, because the board of inquiry was totally inadequate: it failed to give those guardsmen any chance of proving negligence on behalf of the British Government under the Crown Proceedings (Armed Forces) Act 1987. Basically, it made no attempt to look at the causes of the accident. The board looked at how to stop such an accident in the future rather than at the cause. Those guardsmen must prove negligence in terms of that accident. To do so they must have access to information.
Why was the blind shell uncleared? What were the contractual arrangments between the United Kingdom Government and the Canadian Government? What were the range orders at the time? Most important, what was the briefing given to those guardsmen when they were ordered into the impact area of a live firing range to dig trenches? Surely important briefings were given to those guardsmen at that time. If they were not given a proper briefing, that is the type of thing that would amount to negligence. Proof of negligence is the only chance open to those guardsmen to receive anything other than a mere pittance, for the sum given is a pittance relative to payments for a similar injury suffered in the private sector. The hon. Member for Walsall, North was correct to mention the compensation of £300,000 that was given for a commensurate civilian injury.
The board of inquiry must be reopened in the interests of giving an opportunity of justice to the three guardsmen. As has been said, they were doing nothing except their duty, as commanded by Her Majesty's Government.
I ask my hon. Friend the Minister to agree to recommend to the Government that the board of inquiry be reopened forthwith.

The Minister of State for the Armed Forces (Mr. Archie Hamilton): I congratulate the hon. Member for Walsall, North (Mr. Winnick) on obtaining the Adjournment debate. He has raised a moving and tragic case that has received much publicity outside the House and has attracted the interest of many hon. Members.
Guardsman Povey was involved in an appalling accident, and it is deeply saddening that his career—and that of the other two soldiers involved in the incident—


should have been curtailed so tragically. I am very grateful to have been given the opportunity to explain to the House the background which gave rise to this incident, together with the benefits available and the circumstances in which other compensation payments may be made. It will be clear to the House that there is no intention of abandoning this soldier—or, indeed, any other service man injured in the line of duty, whether as a result of armed conflict or not.
May I express my personal gratitude to the Royal British Legion and the British Limbless Ex-servicemen's Association for their role in supporting those men, and pay tribute to the men themselves for the magnificent way in which they are coming to terms with their disabilities. All three were offered a skiing holiday in Germany last year by BLESMA, and two were able to go. I also understand that, depending on his resettlement plans, Guardsman Povey is to attend a course in Scotland later this year, encompassing sailing, riding and shooting. Furthermore, earlier this year, the British Legion look the men to the Sunshine Games for the disabled in Florida, where I believe they performed very creditably. All that demonstrates the greatest determination and courage on the part of those men.
The House will wish to know that Guardsman Povey remains in service, still receiving medical care, and, that therefore no decisions have yet been taken on when he will be medically discharged. That decision will be taken only when his treatment has been completed. Lance Corporal Ray is to be discharged later this year, and, as many hon. Members will know, Mr. Hicks was discharged at the end of last year.
As we have heard, Guardsman Povey was injured in an accident in July 1989, during a training exercise at the Suffield training area in Canada. He was engaged—together with the other two soldiers—in digging a trench for a Milan anti-tank weapons system. Having removed the turf, they went on to remove the topsoil below in preparation for a mechanical digger, when one of them struck a buried munition which exploded. Medical assistance was called for immediately, and all three soldiers were taken to Medicine Hat hospital. The munition was subsequently identified as having been fired on the Suffield training area some time in 1984–85. A board of inquiry was held into the accident and a summary—including the conclusion—has been released to one firm of solicitors, and would be released on request to any other firm, representing the three men.
I should say to my hon. Friend the Member for Winchester (Mr. Browne) that it is not normal Ministry of Defence practice to issue the whole report of a board of inquiry, because that would affect the evidence given to that board of inquiry. However, I am convinced that the summary contains all the component parts of the report.

Mr. Sayeed: I have read the summary, which uses the term "adequately briefed". That is the crux of the problem. What does "adequately briefed" mean? Until the guardsmen and their legal representatives know, they will not know whether they have a case for compensation.

Mr. Hamilton: I am not sure that the full report would spell out the meaning of "adequately briefed". I should have thought that the report covered the whole question of the guardsmen's briefing, but I do not know whether it is possible to add to it.

Mr. Winnick: The soldiers were not responsible?

Mr. Hamilton: Investigations concluded that the fuse on the munition had not functioned when it was fired, so that a so-called "blind" was left buried approximately 8–10 in below the ground. As the round had been in the ground for up to five years, its detonator could have become very sensitive.
I must emphasise that there is no question of any of the soldiers being at fault or, indeed—I shall come back to this point—of blame attaching to anyone. The incident was thoroughly investigated and the conclusion reached by the inquiry was that it was a tragic accident for which no one could be blamed. No one could be reasonably expected to know that there was a buried munition at the spot where the trench was being dug. There is a well established procedure for reporting and disposing of these "blinds" by range safety and ammunition technical staff. The procedure is comprehensive and is assiduously applied, but we must recognise that, however comprehensive the safety procedure, there may be isolated instances, as in this case, where the munition was buried and its existence unknown to exercising troops and safety staff.
On the question of compensation, I can confirm that claims have been made on behalf of all three soldiers by two leading firms of solicitors. It may be helpful at this stage if I gave some background to claims against Government Departments.
The House will recollect very well the lengthy debates that arose out of the decision in 1986 to repeal section 10 of the Crown Proceedings Act. This had the effect, from the date of the repeal, of putting service personnel in exactly the same position as all other groups of employees as regards their legal right to seek compensation from their employers for injuries received in the course of their work. That is exactly the position that Guardsman Povey and the other two soldiers are now in. They have the right to take proceedings against the Ministry of Defence.
Let me clarify why it is that the Ministry of Defence should deal with these claims even though the accident took place in Canada on Canadian Government property—this answers one of the points raised by my hon. Friend the Member for Bristol, East (Mr. Sayeed). As part of the agreement with the Canadians for the use of the Suffield range by the British Army, the MOD has agreed to indemnify the Canadians against all claims for compensation, actions and suits made as a result of British use of the range. That is the usual practice for forces operating on foreign soil. Much has been made, in the press and elsewhere, of the ownership of the particular munition involved—ownership is irrelevant. If there had been any negligence or fault established in this incident, the MOD would have accepted liability on behalf of those responsible.
I have to say clearly that, if there was any degree of fault or negligence on the part of the Ministry, or anyone acting on its behalf, liability would not be in question. If it had been considered that, on the balance of probabilities, a court of law would have found negligence, we would have sought the advice of our lawyers on how much the court would have awarded in damages, and that sum would have been offered to the service men.
My hon. Friend the Member for Bristol, East raised the issue of the release of the memorandum of understanding. As far as I know, there is no such memorandum. I suspect that there is an exchange of letters that covers the point


about indemnifying the Canadians against claims for compensation. My hon. Friend also asked whether the range orders could be released, and I can assure him that that can be done. I shall organise that.
I acknowledge that, in cases such as Guardsman Povey's, there can be an instinctive reaction to ignore the legal issues and say that the case is so deserving of compassion that we should pay compensation irrespective of our liability. But how could we distinguish the case from previous ones, or perhaps others to come, without creating anomalies and injustices? A line has to be drawn, and the fairest way is on the basis of our legal liability. Decisions on other grounds could only be a matter for arbitrary judgment.

Mr. John Browne: My hon. Friend is talking about the legal liabilities of the British Government. Is he absolutely satisfied that the exchange of letters and the full briefings given to the guardsmen have been released to their solicitors, so that their legal representatives stand a chance of proving negligence on behalf of Her Majesty's Government? Without that chance, the guardsmen will not receive any compensation under present legislation.

Mr. Hamilton: As I said, the issue of the briefings given to the soldiers was covered under the summary of the report and the inquiry. From then on, it is a question of legal judgment as to whether negligence can be proved against the Ministry of Defence. The advice that I am being given is that that cannot be done.
As I have said, the accident was thoroughly investigated, and it has been concluded that no improvement in procedures could have guaranteed that this tragic accident would not have happened. However, that is not the end of the matter. Lest there be any doubt about this, let me assure the House that Guardsman Povey will remain a member of the armed forces on full pay until he is medically fit to be discharged, and before he is discharged he will receive a full programme of resettlement advice and counselling interviews.
However, there remains the question of what benefits and awards are available to soldiers, such as Guardsman Povey, injured in the line of duty, but where no fault attaches to the MOD or anyone for whom it is responsible. May I first of all remind the House of the provision which is made through established pension schemes, particularly for service personnel who are medically discharged on account of injury or ill health which is attributable to their service. As hon. Members are, I am quite sure, aware, there are two such schemes. One is the war pension scheme, which is administered by my right hon. Friend the Secretary of State for Social Services and about which I shall say something shortly. The other is the armed forces' own occupational pension scheme, which is administered by the Ministry of Defence.
The armed forces scheme provides a pension, and a lump sum, for any service man who is invalided, regardless of whether the cause is attributable to service or not, as long as he has given at least two years qualifying service. But where the cause is attributable to service—there is no

doubt of this in the circumstances of the incident being debated—the benefits are significantly greater, and there is no minimum qualifying period of service. In practice, the trigger for converting to an attributable pension is the award of a war pension by the DSS. I shall return to this in a moment.
Benefits of the armed forces scheme include an additional lump sum, and a pension which is assessed according to the degree of disability. Where the degree of disability is assessed at 100 per cent. the guaranteed minimum pension is calculated to provide an income, when taken together with the standard rate of war disability pension paid by the Department of Social Security, which is about two thirds of the military salary appropriate to the man's rank.
The war pension scheme, administered, as I said earlier, by the Department of Social Security, provides tax-free benefits for people injured or disabled as a result of service in the armed forces. It also provides pensions for the widow or other dependants of someone who dies as a result of service.
Let me give an example of what these benefits and pension awards could mean to a young soldier—a private—with something like three years' service and earning a base salary of about £8,700, and invalided from the service. First, his normal service invaliding pension would amount to a little less than £500 a year and his tax-free terminal grant would be a little less than £1,500. The Department of Social Security would then assess his degree of disability. At 100 per cent., a war pension would be £84.90 a week. In addition, the further pensions payable would amount to £7,200 a year tax-free, index-linked to take account of inflation, and payable for life.

Mr. John Browne: Will my hon. Friend give way?

Mr. Hamilton: No, I am about to finish.
He would also receive tax-free lump sum payment of about £6,500. The capitalised sum necessary to fund this range of pension awards and benefits has been actuarially assessed as in the order of £150,000. Also, these figures should be compared not to cases where compensation has been paid as a result of negligence, but to the kind of provision an employer might make for his employees injured in the course of their work where no element of negligence is involved.
Moreover, these benefits do not represent the entire picture. An ex-service man, even though awarded a 100 per cent. disability pension, may be able to find employment as the hon. Member for Walsall, North acknowledged. Any earnings he receives would of course be in addition to his combined pensions and subject to the usual tax allowances. On the other hand, if his disability made him unemployable, he would be entitled to receive additional payments under the war pension scheme, such as unemployability supplement and invalidity allowance.
The motion having been made after Ten o'clock, and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at seventeen minutes past Eleven o'clock.